Good afternoon, I am working on this and I need some assistance to complete the worksheet. I attached the excel file and expense sheets for the needed information. Thank you for your time!

Over lunch, you and Mary meet to discuss next steps with the expansion project.

?Do we have everything we need on sales and costs?? you ask. ?It must be time to compute the net present value (NPV) and internal rate of return (IRR) of the Apix expansion project.?

?We have the data from James and Luke regarding projected sales and costs, respectively, for the food packaging project,? says Mary. ?It is feasible to project that we will receive a tax break from this implementation. I have information from our audit firm that indicates that future depreciation methods for taxes will be straight-line; however, the corporate rates will be reduced to 35% as we assumed in our weighted average cost of capital (WACC) calculation.?

?That sounds good,? you say.

?Right," says Mary. "You can use a WACC of 10%for the computation of the NPV and comparison for IRR."

?I?ve got the information I need from Luke and James,? you say. "Does this look right to you? Here?s what they gave me,? you say, as you hand a sheet of paper to Mary.

?Let?s look at this now while we?re together,? she says.

The information you hand to Mary shows the following:

• Initial investment outlay of $30 million, consisting of $25 million for equipment and $5 million for net working capital (NWC) (plastic substrate and ink inventory); NWC recoverable in terminal year
• Project and equipment life: 5 years
• Sales: $25 million per year for five years
• Assume gross margin of 60% (exclusive of depreciation)
• Depreciation: Straight-line for tax purposes
• Selling, general, and administrative expenses: 10% of sales
• Tax rate: 35%

You continue your conversation.

?It looks good,? says Mary. ?Use this information from Luke and James to compute the cash flows for the project.?

?No problem,? you say.

?Then, compute NPV and IRR of the project using theExcel spreadsheetI sent earlier today,? says Mary. ?Use the IRR financial function for the computation of IRR.?

?Okay,? you say. "I?ll submit my Excel file showing the computation of cash flows, NPV, and IRR by the end of week so you can look at it over the weekend.?

?Thanks,? says Mary.

Complete the attached worksheet.

Apex Printing Balance Sheets As of December 31, 2013 and 2012 Assets Cash Accounts Receivable Inventory Total Current Assets Land Building & Equipment Less: Accumulated Depreciation - Building & Equipment Total Long Term Assets Total Assets 000$ 000$ 2013 6,000 2,350 12,100 20,450 2012 5,700 2,300 6,500 14,500 25,000 20,000 300,000 300,000 (187,850) (160,000) 137,150 160,000 157,600 174,500 Liabilities and Stockholders' Equity Accounts Payable Salaries Payable Interest Payable Short Term Notes Payable Taxes Payable Total Current Liabilities 4,600 0 1,500 12,000 0 18,100 3,500 2,100 0 0 5,600 11,200 Mortgate Payable Total Long Term Liabilities 54,950 54,950 100,000 100,000 60,000 24,550 84,550 157,600 60,000 3,300 63,300 174,500 Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity Apex Printing Income Statements For the Periods Ended December 31, 2013 and 2012 Revenue: Less: Cost of Goods Sold Less: Depreciation Expense Gross Margin Selling, General & Administrative Expenses Income Before Interest & Taxes Interest Expense Income Before Taxes Income Taxes Net Income 000$ 000$ 2013 2012 450,000 475,000 (324,300) (374,500) (27,850) (26,000) 97,850 74,500 (29,100) (32,000) 68,750 42,500 (7,500) (6,000) 61,250 36,500 (35,000) (30,000) 26,250 6,500 Apex Printing Statement of Cash Flows For the Period Ended December 31, 2013 000$ Cash Flows from Operating Activities: Net Income Adjustments to reconcile net income to net cash provided by operating activities Depreciation Expense Increase in accounts receivable Increase in inventory Decrease in salaries payable Increase in interest payable Decrease in taxes payable Increase in Short Term notes Payable Increase in accounts payable Net Cash Flow from Operating Activities Cash Flows from Investing Activities: Cash paid to purchase land Net Cash Flow from Investing Activities 26,250 27,850 (50) (5,600) (2,100) 1,500 (5,600) 12,000 1,100 55,350 (5,000) (5,000) Cash Flows From Financing Activities: Cash paid for mortgage Cash paid for dividends Net Cash Flow from Financing Activities Net Increase in Cash Plus: Cash Balance at December 31, 2012 Cash Balance at December 31, 2013 (45,050) (5,000) (50,050) 300 5,700 6,000 FIN 615 NPV and IRR calculations Cost of Capital Time/yr Cash flow Input here Discounted CF NPV PV factor IRR 10.00% 0 1 2 3 4 5 0 0 0 0 0 0 0 =cf1/((1+n)^1=cf2/((1+n)^2) =cf3/((1+n)^3)=cf4/((1+n)^4)=cf5/((1+n)^5) 0.909090909 0.826446281 0.7513148009 0.6830134554 0.6209213231 Err:523