Discount rate 0.0% Now 1 Purchase of equipment $ (420,000) Investment in working capital $ (80,000)...

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Discount rate 0.0% Now 1 Purchase of equipment $ (420,000) Investment in working capital $ (80,000) Overhaul of equipment Salvage value of the equipment Blue cells can be modified 3 $ (50,000) 5 $ 30,000 Working capital released Sales $ 80,000 $ 850,000 $ 850,000 $ 850,000 $ 850,000 $ 850,000 Variable expenses $ (500,000) $ (500,000) $ (500,000) $ (500,000) $ (500,000) Fixed out-of-pocket operating costs $ (200,000) $ (200,000) $ (200,000) $ (200,000) $ (200,000) Total cash flows (a) $ (500,000) $ 150,000 $ 150,000 $ 100,000 $ 150,000 $ 260,000 Discount factor (b) Present value of cash flows (a) x (b) $ 1.000 (500,000) $ 150,000 $ 1.000 1.000 1.000 1.000 1.000 150,000 $ 100,000 $ 150,000 $ 260,000 Net present value (SUM B16:G16) $ 310,000 Discount rate 0.0% Now 1 Purchase of equipment $ (420,000) Investment in working capital $ (80,000) Overhaul of equipment Salvage value of the equipment Blue cells can be modified 3 $ (50,000) 5 $ 30,000 Working capital released Sales $ 80,000 $ 850,000 $ 850,000 $ 850,000 $ 850,000 $ 850,000 Variable expenses $ (500,000) $ (500,000) $ (500,000) $ (500,000) $ (500,000) Fixed out-of-pocket operating costs $ (200,000) $ (200,000) $ (200,000) $ (200,000) $ (200,000) Total cash flows (a) $ (500,000) $ 150,000 $ 150,000 $ 100,000 $ 150,000 $ 260,000 Discount factor (b) Present value of cash flows (a) x (b) $ 1.000 (500,000) $ 150,000 $ 1.000 1.000 1.000 1.000 1.000 150,000 $ 100,000 $ 150,000 $ 260,000 Net present value (SUM B16:G16) $ 310,000