Is there any chance that you can get this back to me tonight by 11 pm cst? Have had some personal things come up with respect to a funeral :( Would appreciate any feed back and am very willing to pay more.

Trisha

Problem 5 Complete the following problem using excel by May 24th at 11:59 PM Central time. You will be graded based off your usage of excel and the accuracy of your answer. You should use the NPV and IRR functions that are available through excel. DO NOT use the PV table figures. You will lose 5 pts. If you do not use the NPV and IRR Excel functions. Please make sure you look at the demonstration exercise I have posted for chapter 21. You need to use cell references and functions whenever possible. ABC Company is considering the purchase of a computer-aided manufacturing system. The annual before tax cash benefits/savings associated with the system are described below: Decreased Waste cost $100,000 Decrease in operating costs 30,000 Increase in on-time deliveries savings 45,000 The system will cost $700,000 Useful life 7 years Salvage value 0 Cost of Capital 12% Tax Rate 30% Hint: Don't forget to compute net of tax amount. Look at ex 21-19 page 831 and was part of the Week 8 discussion. Depreciation method Straight line Hint: Don't forget the depreciation tax shield. Also, do not use first year half year depreciation---Just do plain straight line. Required: Prepare your solution on the worksheet entitled Solution and use cell references to link to this worksheet on the solution worksheet. 1. Compute the net annual after-tax cash benefits and savings. Use the information above to compute the total annual savings and then you need to compute the net of tax savings. 2. Compute the depreciation tax shield. 3. Set up a table showing the outflow and annual cash inflow. 4. Calculate the payback period for the system. Assume that the company has a policy of only accepting projects with a payback of 5 years or less. Should the company buy the system based on the payback period criteria? Why? 5. Calculate the NPV and IRR for the projects. Should the system be purchased based on the NPV and IRR criteria? Why or Why not? Name: Type name here 1. Compute the net annual after-tax cash benefits and savings. Use the information above to compute the total annual savings and then you need to compute the net of tax savings. 2. Compute the depreciation tax shield. 3. Set up a table showing the net initial investment and net annual cash flow so that you can use this table to answer questions 4 and 5. Time 0 1 2 3 4 5 6 7 4. Calculate the payback period for the system. Assume that the company has a policy of only accepting projects with a payback of 7 years or less. Should the company buy the system based on the payback period criteria? Why? 5. Calculate the NPV and IRR for the projects. Should the system be purchased based on the NPV and IRR criteria? Why or Why not? NPV IRR Recommendation