i think i have most of the answers correct except 2G, I mistly need help with 2G Required information Sanders Company has an opportunity to manufacture and sell a new product for a five year period The company estimated the following costs and revenues for the new product Cost of new equipment Initial working capital required Overhaul of the equipment after three years Salvage value of the equipment after five years Annual revenues and costs $420, eee $ 90, eee $ 50,eee $ 3e, eee Sales Variable expenses Fixed out of pocket operating costs $850, eee $5ee, eee $280, eee When the project concludes in five years the working capital will be released for investment elsewhere in the company Blue cells can be modified Discount rate 0 0 $ $ Purchase of equipment Investment in working capital Overhaul of equipment 9 Salvage value of the equipment 10 Working capital released 11 Sales 12 Variable expenses 13 Fixed out of pocket operating costs 14 Total cash flows (a) 15 Discount factor (b) 16 Present value of cash flows (a) (b) 17 Net present value (SUM B16 16) 18 Now 1 2 3 4 5 (420,000) (80,000) $ (50,000) S 30,000 5 80,000 $ 850,000 $ 850,000 $ 850,000 $ 850,000 $ 850,000 $ (500,000) S (500,000) $ (500,000) S (500,000) S (500,000) $ (200,000) $ (200,000) $ (200,000) $ (200,000) $200,000) (500,000) $ 150,000 $ 150,000 $ 100,000 $ 150,000 S 260,000 1 000 1 000 1 000 1 000 1 000 1 000 (500,000) $ 150,000 $ 150,000 $ 100,000 $ 150,000 $ 260,000 310,000 $ $ S 2 Refer to the Excel template a Why does cell B7 have an $90,000 cash outflow, whereas cell G10 shows the same $90,000 as a cash inflow b Will the value of 1 000 that is shown in cell 815 stay constant or change as the Excel template is used to calculate the internal rate of return Why c Will the values of 1000 that are shown in cells C15 through G15 stay constant or change as the Excel template is used to calculate the internal rate of return Why d Will the discount factors in cells C15 through G15 increase or decrease as the discount rate in cell B3 increases Why e Once the discount rate in cell B3 is changed to some percentage greater than zero, will the amount shown in cell Cis always be greater than or less than the amount shown in cell F16 Why Would it be correct to conclude that this project has a net present value of $310,000 given that this is the amount currently shown in cell B17 Why g Once this template has been used to calculate the internal rate of return, what dollar amount will appear in cell B172 Complete this question by entering your answers in the tabs below Reg 2A Reg 28 Reg 2c Reg 20 Reg 2E Reg 2 Reg 2G 2a Why does cell B7 have an $90,000 cash outflow, whereas cell G10 shows the same $90,000 as a cash inflow Because we always assume the same amount of working capital released at the beginning of the project will be reinvested in the same project at the end of its life Because we always assure the same amount of working capital invested at the beginning of the project will be released at the end of the project Reg 2A Reg 1B Reg 2c Req 2D Reg 2 Req 2F Req 2G 2b Will the value of 1 000 that is shown in cell B15 stay constant or change as the Excel template is used to calculate the internal rate of return Why It will because 2c Will the values of 1 000 that are shown in cells C15 through G15 stay constant or change as the Excel template is used to calculate the internal rate of return Why They will because the cash flows occur in future periods so they need to be discounted the cash flows occur now so they do not need to be discounted 2d Will the discount factors in cells C15 through G15 increase or decrease as the discount rate in cell B3 increases Why They will because a higher discount rate means that you would have to set aside less money today to earn a specific amount in the future a higher discount rate means that you would have to set aside more money today to earn a specific amount in the future Reg 2A Reg 2B Reg 20 Reg 2D Req 2E Reg 2F Reg 2G 2e Once the discount rate in cell 83 is changed to some percentage greater than zero, will the amount shown in cell C16 always be greater than or less than the amount shown in cell F16 Why It will always be the amount in cell F16 because

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i think i have most of the answers correct except 2G, I mistly need help with 2G  Required information Sanders Company has an opportunity to manufacture and sell a new product for a five year period  The company estimated the following costs and revenues for the new product  Cost of new equipment Initial working capital required Overhaul of the equipment after three years Salvage value of the equipment after five years Annual revenues and costs  $420, eee $ 90, eee $ 50,eee $ 3e, eee Sales Variable expenses Fixed out of pocket operating costs $850, eee $5ee, eee $280, eee When the project concludes in five years the working capital will be released for investment elsewhere in the company Blue cells can be modified Discount rate 0 0  $ $ Purchase of equipment Investment in working capital Overhaul of equipment 9 Salvage value of the equipment 10 Working capital released 11 Sales 12 Variable expenses 13 Fixed out of pocket operating costs 14 Total cash flows (a) 15 Discount factor (b) 16 Present value of cash flows (a) (b) 17 Net present value (SUM B16 16) 18 Now 1 2 3 4 5 (420,000) (80,000) $ (50,000) S 30,000 5 80,000 $ 850,000 $ 850,000 $ 850,000 $ 850,000 $ 850,000 $ (500,000) S (500,000) $ (500,000) S (500,000) S (500,000) $ (200,000) $ (200,000) $ (200,000) $ (200,000) $200,000) (500,000) $ 150,000 $ 150,000 $ 100,000 $ 150,000 S 260,000 1 000 1 000 1 000 1 000 1 000 1 000 (500,000) $ 150,000 $ 150,000 $ 100,000 $ 150,000 $ 260,000 310,000 $ $ S 2  Refer to the Excel template a  Why does cell B7 have an $90,000 cash outflow, whereas cell G10 shows the same $90,000 as a cash inflow  b  Will the value of 1 000 that is shown in cell 815 stay constant or change as the Excel template is used to calculate the internal rate of return  Why  c  Will the values of 1000 that are shown in cells C15 through G15 stay constant or change as the Excel template is used to calculate the internal rate of return  Why  d  Will the discount factors in cells C15 through G15 increase or decrease as the discount rate in cell B3 increases  Why  e  Once the discount rate in cell B3 is changed to some percentage greater than zero, will the amount shown in cell Cis always be greater than or less than the amount shown in cell F16  Why    Would it be correct to conclude that this project has a net present value of $310,000 given that this is the amount currently shown in cell B17  Why  g  Once this template has been used to calculate the internal rate of return, what dollar amount will appear in cell B172 Complete this question by entering your answers in the tabs below  Reg 2A Reg 28 Reg 2c Reg 20 Reg 2E Reg 2 Reg 2G 2a  Why does cell B7 have an $90,000 cash outflow, whereas cell G10 shows the same $90,000 as a cash inflow  Because we always assume the same amount of working capital released at the beginning of the project will be reinvested in the same project at the end of its life Because we always assure the same amount of working capital invested at the beginning of the project will be released at the end of the project Reg 2A Reg 1B Reg 2c Req 2D Reg 2 Req 2F Req 2G 2b  Will the value of 1 000 that is shown in cell B15 stay constant or change as the Excel template is used to calculate the internal rate of return  Why  It will because 2c  Will the values of 1 000 that are shown in cells C15 through G15 stay constant or change as the Excel template is used to calculate the internal rate of return  Why  They will because the cash flows occur in future periods so they need to be discounted the cash flows occur  now  so they do not need to be discounted  2d  Will the discount factors in cells C15 through G15 increase or decrease as the discount rate in cell B3 increases  Why  They will because a higher discount rate means that you would have to set aside less money today to earn a specific amount in the future  a higher discount rate means that you would have to set aside more money today to earn a specific amount in the future  Reg 2A Reg 2B Reg 20 Reg 2D Req 2E Reg 2F Reg 2G 2e  Once the discount rate in cell 83 is changed to some percentage greater than zero, will the amount shown in cell C16 always be greater than or less than the amount shown in cell F16  Why  It will always be the amount in cell F16 because

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i think i have most of the answers correct except 2G, I mistly need help with 2G. Required information Sanders Company has an opportunity to

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