I got the answer below from an expert but when I do it in excel I cannot do it right. Please help to do it in excel and also show how you did. Thanks.

To calculate the NPV of the project, we need to follow the steps outlined in Method 1: Tax Effects, then Cash Flows then NPV. Step 1: Calculate the taxable income and tax expense Year 1: Sales revenue = 75,000 x $415 = $31,125,000 Variable costs = 75,000 x $285 = $21,375,000 Fixed costs = $3,120,000 Depreciation expense = $21,000,000 / 6 = $3,500,000 Taxable income = $3,130,000 Tax expense = $939,000 (30% x $3,130,000) Years 2-5: Sales revenue = unit sales x $415 Variable costs = unit sales x $285 Fixed costs = $3,120,000 Net working capital = 20% x (unit sales for next year - unit sales for current year) Depreciation expense = $21,000,000 / 6 Taxable income = (sales revenue - variable costs - fixed costs - depreciation expense - net working capital) x (1 - tax rate) Tax expense = taxable income x tax rate Step 2: Calculate the cash flows Year 0: Initial investment = -$23,000,000 ($21,000,000 for machine + $2,000,000 for net working capital) Years 1-5: Operating cash flow = (sales revenue - variable costs - fixed costs - depreciation expense) x (1 - tax rate) Change in net working capital = net working capital for this year - net working capital for previous year Total cash flow = operating cash flow + change in net working capital Year 5: Terminal cash flow = machine salvage value + net working capital recovery - tax on salvage value Machine salvage value = $21,000,000 x 30% = $6,300,000 Net working capital recovery = net working capital for year 5 Tax on salvage value = (machine salvage value - book value) x tax rate Book value = $21,000,000 - ($21,000,000 / 6 x 5) = $7,000,000 Tax on salvage value = ($6,300,000 - $7,000,000) x 30% = -$210,000 (tax credit) Step 3: Calculate the NPV Using a required rate of return of 15%, we can discount the cash flows and calculate the NPV.

Explanation:

Year Cash Flow Discount Factor Discounted Cash Flow 0 -$23,000,000 1.0000 -$23,000,000 1 $4,882,000 0.8696 $4,240,727 2 $10,195,200 0.7561 $7,715,811 3 $11,100,000 0.6575 $7,300,136 4 $5,056,000 0.5718 $2,890,170 5 $9,124,900 + $5,400,000 - $210,000 0.4972 $7,630,428 NPV = $9,787,272

Therefore, the NPV of the project is $9,787,272. This indicates that the project is profitable and worth pursuing as its NPV is positive. (b) To calculate the NPV of the project assuming it can be repeated indefinitely, we need to use the perpetuity formula is: NPV = CF / r where: CF = the annual cash flow r = the discount rate We can calculate the annual cash flow by taking the average of the cash flows for years 1-5 (excluding the initial investment). Annual cash flow = ($4,882,000 + $10,195,200 + $11,100,000 + $5,056,000 + $9,314,900) / 5 = $8,309,420 Using a required rate of return of 15%, we can now calculate the NPV assuming the project can be repeated indefinitely: NPV = $8,309,420 / 0.15 = $55,396,133.33 Therefore, assuming the project can be repeated indefinitely, the NPV of the project is $55,396,133.33. If there are two mutually exclusive projects, we would choose the project with the highest NPV. In this case, the project with an NPV of $6 million has a higher NPV than the project with an NPV of $4 million. However, if we assume that the projects can be repeated indefinitely, we would choose the project with the highest NPV per year. In this case, the QUT corporation project has an NPV per year of $55,396,133.33, which is higher than the NPVs of the other two projects. Therefore, we would choose the QUT corporation project assuming it can be repeated indefinitely.

Tax Effects, then Cash Flows then NPV). QUT corporation projects their future unit sales for a new headphone. The projected unit sales are as below. Unit : useful life of 6 years. Also, costs and unit price are as below. In five years, the machine can be sold for about 30% of its acquisition cost. The tax rate is 30% and the required rate of return is 15%. Required (a) What is the NPV of the project? Explain and defend your processes, answer, and calculations clearly. assuming that two projects are mutually exclusive and can be repeated indefinitely? Why? Explain and defend your processes, answer, and calculations clearly