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Can you help me to fill this Excel document, and please provide Excel formulas? A company buys a machine for $500,000 and depreciates it on
Can you help me to fill this Excel document, and please provide Excel formulas?
A company buys a machine for $500,000 and depreciates it on a straight-line basis over a five-year period for tax purposes. The investment would result in cash cost savings of $200,000 per year, before taxes, for five years. At the end of five years, it was estimated that the machine would be sold for $75,000. The gain on the sale of the machine would be taxed at a 40% rate. Is the investment in the machine attractive in economic terms, given all of the cash flows? Please assume that the cash flows occur at the end of each year, that the tax rate is 40%, and that the appropriate discount rate is 8%. What is the net present value? the internal rate of return? the payback period? 1 Cost of machine = Useful life = Cash cost savings = Salvage value = Tax rare = wacc = Time Cost savings Depreciation Gross profit Taxes Net profit Operating profit Salvage FCF NPV = IRR = Payback period =Step by Step Solution
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