Chapter 14: Applying Excel: Exercise (Part 2 of 2) (Algo) 2 The company is considering a project involving the purchase of new equipment. Change the data area of your worksheet to match the following: Use Exhibit 14B-1 and Exhibit 14B-2. (Use approprlate factor(s) from the tables provided.) B A Chapter 14: Applying Excel 1 2 3 4 5 S 6 $ 290.000 45.000 25,000 35,000 $ 7 Data Example E Cost of equipment needed Working capital needed Overhaul of equipment in four years Salvage value of the equipment in five years Annual revenues and costs: Sales revenues Cost of goods sold Out-of-pocket operating costs Discount rate 8 $ 9 $ 385.000 10 $ $ 230.000 80.000 10 % 12 13 a. What is the net present value of the project? (Negative amount should be Indicated by a minus sign. Round your present value factor to 3 decimals and round all other Intermediate calculations to nearest whole dollar.) Net present value c. The internal rate of return is between what two whole discount rates (e.g.. between 10% and 11%, between 11% and 12%, between 12% and 13%, between 13% and 14%, etc.)? The internal rate of return is between 9% and 96 d. Reset the discount rate to 10%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value? Minimum salvage value required to generate a positive present value ! Required information Chapter 14: Applying Excel (Algo) The Chapter 14 Form worksheet is to be used to create your own worksheet version of Example E and Exhibit 14-8 in the text. Chapter 14: Applying Excel: Exercise (Part 2 of 2) (Algo) 2. The company is considering a project involving the purchase of new equipment. Change the data area of your worksheet to match the following: Use Exhibit 14B-1 and Exhibit 14B-2. (Use appropriate factor(s) from the tables provided.) B A 1 Chapter 14: Applying Excel NM + $ $ 3 Data 4 Example E 5 Cost of equipment needed 6 Working capital needed 7 Overhaul of equipment in four years 8 Salvage value of the equipment in five years 9 Annual revenues and costs: 10 Sales revenues 11 Cost of goods sold 12 Out-of-pocket operating costs 13 Discount rate 290,000 45,000 25,000 35,000 $ $ AGA 385,000 230,000 80,000 10 % $