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

*I think I did the excel sheet correctly; please can my work be checked because I'm not completely sure about the way excel rounds my decimals for the discount factor and present value of cash flows! please let me know

Basically, if the excel sheet at the top isn't fully correct with the way the numbers are rounded, I won't be able to get the correct answer for questions a. b. c.

I've tried it a few times rounding differently but I still don't know exactly what I'm doing wrong. The system where I turn these in is also very picky about the answers, it has to be exact.

A B D E G 1 Chapter 14: Applying Excel Data 4 Example E 5 Cost of equipment needed $60,000 6 Working capital needed $100,000 Overhaul of equipment in four years $5,000 7 8 Salvage value of the equipment in five years $10,000 9 Annual revenues and costs: 10 Sales revenues $200,000 11 Cost of goods sold $125,000 12 Out-of-pocket operating costs $35,000 13 Discount rate 14% 14 15 Enter a formula into each of the cells marked with a ? below 16 Exhibit 14-8 Years 17 Now 1 2 3 4 5 18 Purchase of equipment $ (60,000) 19 20 Investment in working capital $ (100,000) 21 Sales $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 22 Cost of goods sold $ (125,000) $ (125,000) $ (125,000) $ (125,000) $ (125,000) 23 Out-of-pocket operating costs $ (35,000 $ (35,000) $ (35,000 $ (35,000) $ (35,000) 24 Overhaul of equipment $ (5,000) 25 Salvage value of the equipment $ 10,000 26 Working capital released $ 100,000 Total cash flows (a) $ (160,000) $ 40,000 $ 40,000 $ 40,000 $ 35,000 27 $ 150,000 Discount factor (14%) (b) 1.000 0.8772 0.76947 0.67497 0.59208 28 0.519368 Present value of cash flows (a) (b) 29 $ (160,000). $35,088.00 30778.8000 $26,998.80 $20,722.80 $ 77,905 30 Net present value $ 31,493 31 32 *Use the formulas from Appendix 13B: 33 Present value of $1 = 1/(1+r)^n 34 Present value of an annuity of $1 = (1/r)*(1-(1/(1+r)^n)) 35 where n is the number of years and r is the discount rate 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.) A B C 1 Chapter 14: Applying Excel 2 3 Data 4 5 $ 6 $ 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: 390,000 35,000 45,000 30,000 7 $ 8 $ 9 10 Sales revenues $ 11 $ Cost of goods sold Out-of-pocket operating costs 435,000 215,000 90,000 18 % 12 $ 13 Discount rate 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 % and % d. Reset the discount rate to 18%. 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