Madrid Chips is a manufacturer of prototype chips based in Madrid, Spain. Madrid's Chlef Marketing Officer has provided the Following forecast 2018 Volume Forecast (Units) 615 2018 Average Selling Price $95,000 Annual Volume Growth (6) 100 Annual Selling Price Increase (96) 596 To address future demand, Madrid is considering replacing its production equipment. The old equipment is fully depreciated and can be sold for a salvage if the plant is replaced. Any required working capital investment is to be recouped at the end of the project's life Replace Initial investment in 2018 566,300,000 Disposal of old equipment (pre-tax) 54.200,000 Working capital investment invested on day 1 and recovered at final disposal) $11,000,000 Terminal disposal value in 2024 (pre tax) $16,000,000 Useful life (Years) 7 Total annual cash operating costs per prototype chip 566.000 Annal cash operating cost increase (9) 29 Required Rate of Return 149 Applicable Tax Rate 35% Madrid Chips uses straight-line depreciation assuming tero terminal disposal value Madrid is subjected to a 35% income tax rate an operating income and gains/losses (eg on disposal of Assets) Anname the initial investment is made at the beginning of 2018 and all transactions thereafter secur on the last day of the year. Answer cells must remain in the same location so do not intere/delete column or rows in the file. Numeric answers must include a formula or reference 20 do not hard enter the answer 1. Calculate operating income and net income (gains and losses on disposal. Interest and taxes are considered non-operating tema) 2. Calculate the cash flows 3. Calculated discounted cash flows 4. Calculate the Net Present Value Internal Rate of Return and Payback Period REPLACE INCOME STATEMENT Annual Chance Day 2011 2019 2020 2021 2022 2021 2024 Revenue -Operating costs Operating Income Non-Operating Gains (Losses) Pre-tax income Taxes Net Income CASH ROWS Net CashHows Discount Factor Discounted Cash Flows Net Present Value Internal Rate of Return Cumulative Net Cash Flows Payback Period Madrid Chips is a manufacturer of prototype chips based in Madrid, Spain. Madrid's Chlef Marketing Officer has provided the Following forecast 2018 Volume Forecast (Units) 615 2018 Average Selling Price $95,000 Annual Volume Growth (6) 100 Annual Selling Price Increase (96) 596 To address future demand, Madrid is considering replacing its production equipment. The old equipment is fully depreciated and can be sold for a salvage if the plant is replaced. Any required working capital investment is to be recouped at the end of the project's life Replace Initial investment in 2018 566,300,000 Disposal of old equipment (pre-tax) 54.200,000 Working capital investment invested on day 1 and recovered at final disposal) $11,000,000 Terminal disposal value in 2024 (pre tax) $16,000,000 Useful life (Years) 7 Total annual cash operating costs per prototype chip 566.000 Annal cash operating cost increase (9) 29 Required Rate of Return 149 Applicable Tax Rate 35% Madrid Chips uses straight-line depreciation assuming tero terminal disposal value Madrid is subjected to a 35% income tax rate an operating income and gains/losses (eg on disposal of Assets) Anname the initial investment is made at the beginning of 2018 and all transactions thereafter secur on the last day of the year. Answer cells must remain in the same location so do not intere/delete column or rows in the file. Numeric answers must include a formula or reference 20 do not hard enter the answer 1. Calculate operating income and net income (gains and losses on disposal. Interest and taxes are considered non-operating tema) 2. Calculate the cash flows 3. Calculated discounted cash flows 4. Calculate the Net Present Value Internal Rate of Return and Payback Period REPLACE INCOME STATEMENT Annual Chance Day 2011 2019 2020 2021 2022 2021 2024 Revenue -Operating costs Operating Income Non-Operating Gains (Losses) Pre-tax income Taxes Net Income CASH ROWS Net CashHows Discount Factor Discounted Cash Flows Net Present Value Internal Rate of Return Cumulative Net Cash Flows Payback Period