Chapter 13: Applying Excel: Excel Worksheet (Part 1 of 2)

Download the Applying Excel form and enter formulas in all cells that contain question marks.

For example, in cell C22 enter the formula "= B10".

Note: The present value factors could be computed using the built-in Excel function PV, but we recommend using the formulas in Appendix 13B.

Verify that your worksheet matches the example in the text.

Check your worksheet by changing the discount rate to 10%. The net present value should now be between $56,400 and $56,535depending on the precision of the calculations. If you do not get an answer in this range, find the errors in your worksheet and correct them.

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.

Save your completed Applying Excel form to your computer and then upload it here by clicking Browse. Next, click Save. You will use this worksheet to answer the questions in Part 2.

rev: 11_08_2017_QC_CS-108759

Chapter 13: Applying Excel
Data
Example E
Cost of equipment needed	$60,000
Working capital needed	$100,000
Overhaul of equipment in four years	$5,000
Salvage value of the equipment in five years	$10,000
Annual revenues and costs:
Sales revenues	$200,000
Cost of goods sold	$125,000
Out-of-pocket operating costs	$35,000
Discount rate	14%
Enter a formula into each of the cells marked with a ? below
Exhibit 13-8
		Years
	Now	1	2	3	4	5
Purchase of equipment	?
Investment in working capital	?
Sales		?	?	?	?	?
Cost of goods sold		?	?	?	?	?
Out-of-pocket operating costs		?	?	?	?	?
Overhaul of equipment					?
Salvage value of the equipment						?
Working capital released						?
Total cash flows (a)	?	?	?	?	?	?
Discount factor (14%) (b)	?	?	?	?	?	?
Present value of cash flows (a) x (b)	?	?	?	?	?	?
Net present value	?
*Use the formulas from Appendix 13B:
Present value of $1 = 1/(1+r)^n
Present value of an annuity of $1 = (1/r)*(1-(1/(1+r)^n))
where n is the number of years and r is the discount rate

PLEASE ENTER ON EXCEL SPREAD SHEET & ENTER EXCEL FORMULAS WHERE THE QUESTION MARKS ARE