Could somebody please help? I have no idea what I'm doing. Thanks! If possible, please include the formulas!

nderstand how to use EXCEL Spreadsheet 10 (a) Develop proforma Income Statement Using Excel Spreadsheet 11 (b) Compute Net Project Cashflows, NPV, and IRR 12 (c) Develop problem-solving and critical thinking skills and make long-term investment decisions 2c.co%1 24.40 14 15 1 Life Period of the Equipment4 years 16 2) New equipment cost 17 3) Equipment ship&install cost 18 4) Related start up cost 19 5) Inventory increase 20 6) Accounts Payable increase 21 7)Equip. salvage value before tax 8) Sales for first year (1) 9) Sales increase per year 10) Operating cost (60% of Sales) as a percent of sales in Year 1) 11) Depreciation 12) Marginal Corporate Tax Rate (T) 13) Cost of Capital (Discount Rate) $ 200,000 ($200,000) $35,000) ($5,000) $25,000 $5,000 $15,000 5% $ 120,000) -60% Use 3-yr MACRIS 35% 10% Fing data in the celi's colore ok 23 25 ESTIMATING Initial Outlay (Cash Flow,CFo, T O 26 CF1 CFO CF2 CF3 CF4 28 Year 9 Investments: 0 1) Equipment cost 31 2) Shipping and Install cost 2 3) Start up expenses 33 Total Basis Cost (1+2+3) 44)Net Working Capital 3 Total Initial Outlay (200,000) (35,000) (5,000) (240,000) 460,000 reciation Calculation 7 Operations: Revenue 200,000 $ 210,000 $ 220,500 $ 231,525 120,000) $ (126,000) $ (132,300) $(138,915) $ 106,68030,744 $17.784 8 $ (22,680)$. 57.456 74.826 Depreciation Basis: s 240,000 Operating Cost 40 Depreciation # of years Macrs 4 3 years 41 EBIT 42 Taxes 3 (7,938) $ 20,110 S 26,189 5 $(14,742) $ 37,346 S 48,637 A"B 4 Net Income Year Basis Macrs % Depreciation $79,992 $240,000 33.33% $240,000 44.45% $240,000 12.81% $240,000 7.41% $ 79.992$. 106,680$ 30,744 S 17,784 $106,680 $30,744 $17,784 Add back Depreciation 7Total Operating Cash Flow S79.997 $91,938 S 68,090 S 66,421 9 Terminal values: 50 1) Change in net WC 51 2) Salvage value (after tax) Total Salvage value*(1-marginal tax rate Project Net Cash Flows 460,000 79,997 91,938 68,090 66,421 54 IRRE 5.037 Payback 0.00 Payback Perlod Discounted Payback0.00 a Profitability IndexE CF Count $(460,000) S (460,000) $79,997 S (380,003) 2 $ 91,938 $(288,065) 3$ 68,090 $ (219,974 66.421 S 153.554 51 PLEASE RESPOND TO THESE QUESTIONS ON ANOTHER TAB 5 Payback period 54 years 55 Q#1 would you accept the project based on NPV, IRR? Would you accept the project based on Payback rule if project cut-off is 3 years? 56 58 Q#2 Impact of 2017 Tax Cut Act on Net Income, Cash Flows and Capital Budgeting (Investment) Decisions (a) Estimate NPV, IRR and Payback Period of the project if tax rate equals to 21%. Would you Year CF Discount factor Discounted CF Cummulative CF Count $(460,000) 79,997 S0 accept or reject the project? S0 72 .M 73 (b) As a CFO of the firm, which of the above two scenario (1) or (2) would you choose? Why? 2 $9938 $0 $0 S 68,090 $ 66,421 Payback period 75Q#3 How would you explain to your CEO what NPV means? S0 yea Q#4 What are advantages and disadvantages of using only Payback method? T8 79 Q#5 What are advantages and disadvantages of using NPV versus IRR? #6 Explain the difference between independent projects and mutually exclusive projects. When you are confronted with Mutually Exclusive Projects and have coflicts with NPV and IRR results, which criterion would you use (NPV or IRR) and why? nderstand how to use EXCEL Spreadsheet 10 (a) Develop proforma Income Statement Using Excel Spreadsheet 11 (b) Compute Net Project Cashflows, NPV, and IRR 12 (c) Develop problem-solving and critical thinking skills and make long-term investment decisions 2c.co%1 24.40 14 15 1 Life Period of the Equipment4 years 16 2) New equipment cost 17 3) Equipment ship&install cost 18 4) Related start up cost 19 5) Inventory increase 20 6) Accounts Payable increase 21 7)Equip. salvage value before tax 8) Sales for first year (1) 9) Sales increase per year 10) Operating cost (60% of Sales) as a percent of sales in Year 1) 11) Depreciation 12) Marginal Corporate Tax Rate (T) 13) Cost of Capital (Discount Rate) $ 200,000 ($200,000) $35,000) ($5,000) $25,000 $5,000 $15,000 5% $ 120,000) -60% Use 3-yr MACRIS 35% 10% Fing data in the celi's colore ok 23 25 ESTIMATING Initial Outlay (Cash Flow,CFo, T O 26 CF1 CFO CF2 CF3 CF4 28 Year 9 Investments: 0 1) Equipment cost 31 2) Shipping and Install cost 2 3) Start up expenses 33 Total Basis Cost (1+2+3) 44)Net Working Capital 3 Total Initial Outlay (200,000) (35,000) (5,000) (240,000) 460,000 reciation Calculation 7 Operations: Revenue 200,000 $ 210,000 $ 220,500 $ 231,525 120,000) $ (126,000) $ (132,300) $(138,915) $ 106,68030,744 $17.784 8 $ (22,680)$. 57.456 74.826 Depreciation Basis: s 240,000 Operating Cost 40 Depreciation # of years Macrs 4 3 years 41 EBIT 42 Taxes 3 (7,938) $ 20,110 S 26,189 5 $(14,742) $ 37,346 S 48,637 A"B 4 Net Income Year Basis Macrs % Depreciation $79,992 $240,000 33.33% $240,000 44.45% $240,000 12.81% $240,000 7.41% $ 79.992$. 106,680$ 30,744 S 17,784 $106,680 $30,744 $17,784 Add back Depreciation 7Total Operating Cash Flow S79.997 $91,938 S 68,090 S 66,421 9 Terminal values: 50 1) Change in net WC 51 2) Salvage value (after tax) Total Salvage value*(1-marginal tax rate Project Net Cash Flows 460,000 79,997 91,938 68,090 66,421 54 IRRE 5.037 Payback 0.00 Payback Perlod Discounted Payback0.00 a Profitability IndexE CF Count $(460,000) S (460,000) $79,997 S (380,003) 2 $ 91,938 $(288,065) 3$ 68,090 $ (219,974 66.421 S 153.554 51 PLEASE RESPOND TO THESE QUESTIONS ON ANOTHER TAB 5 Payback period 54 years 55 Q#1 would you accept the project based on NPV, IRR? Would you accept the project based on Payback rule if project cut-off is 3 years? 56 58 Q#2 Impact of 2017 Tax Cut Act on Net Income, Cash Flows and Capital Budgeting (Investment) Decisions (a) Estimate NPV, IRR and Payback Period of the project if tax rate equals to 21%. Would you Year CF Discount factor Discounted CF Cummulative CF Count $(460,000) 79,997 S0 accept or reject the project? S0 72 .M 73 (b) As a CFO of the firm, which of the above two scenario (1) or (2) would you choose? Why? 2 $9938 $0 $0 S 68,090 $ 66,421 Payback period 75Q#3 How would you explain to your CEO what NPV means? S0 yea Q#4 What are advantages and disadvantages of using only Payback method? T8 79 Q#5 What are advantages and disadvantages of using NPV versus IRR? #6 Explain the difference between independent projects and mutually exclusive projects. When you are confronted with Mutually Exclusive Projects and have coflicts with NPV and IRR results, which criterion would you use (NPV or IRR) and why