Marge & Conter $ % & Conditional Format Coll i nsert Delato Format Formatting as Table Styles 240,000 Depreciation Basis: # of years: Macrs 3 years Year Basis $ 240,000 240,000 240,000 240,000 Macrs % 33.33% 44.45% 14.81% 7.41% 100% Depreciation $79,992 $106,680 $35,544 $17,784 240,000 $ Salvage value"(1 - marginal tax rate) Payback Period Projected CF Cumulative CF $ (260,000) $ (260,000) 79,997 $ (180,003) 91,938 $ (88,065) 69,770 $ (18,294) 101,421 $ 83,127 Payback period years Discounted Payback Period Present Value Year Projected CF Discount factor 0 $ 260,000) 1 $ 79,997 91,938 69,770 101,421 Payback period Discounted CF ($260.000) $0 Cummulative CF (200,000) $ (260,000) (260,000) (260,000) (260,000) So Jon 5 Q#1 Would you accept the project based on NPV, IRR? Would you accept the project based on Payback rule if project cut-off is 3 years? Arial L- O' Conditional Morge a Cesar % $ 588 AA Paste N440 BTU x fx 33.33% A . and make long-term investment decisions 1 Lite Period of the Equipment 4 years 15200000 2 Neglement IT Equipment ship & Install cost Sales for first year (1) 9) Sales increase per year 10) Operating cost (60% of Sales) as a percent of sales in Year 1) 11) Depreciation 12) Marginal Corporate Tax Rate( 13) Cost of Capital (Discount Rate) 19 Inventory 20 Accounts Payable increase 21 T) Equip. salvage value before tax Fixing data in the cells colored $15.000 only. Do not well in any other con Do not delete any row e ESTIMATING InitOutliny Cash Flow, CF, T-O) CFO CF C F2CF CF4 slavestments: 1) Equipment cost 2 Shipping and install cost 3) Start up expenses Total Basis Cost (2-3) 344) Not Working Capital 3 Total Initial Outlay 210.000 $ (120,000) $ 220.500 (132,300) $ 231,525 (138,915) (120,000) $ Operations Sales Operating cost Depreciation EBIT Tes Nincome 80 000 $ 84.000 5 29.400 S 54,800 $ 8200 30.8705 57,330 $ 32414 60,197 Add back Depreciation Total Opening Cash Flow - Terminal values 1) Cargo Inne WC 2 Salvage value (her ) a WERT . AutoSave A Home Insert s Draw PROJECT (Capital Budgeting PROBLEM SPRING 2020 Page Layout Formulas Data Review View Aral 14 AA" 2 Wrap Text Mere & Centar S % 9 N N4X fx 33.33% and make long-term investment decisions Life Period of the timent years New equipment on ($200,000) 17 Equipment ship & natal cost * 4 Reed start up cost B antory increase 20 Account Payabile increase 2 ) Equipa ge value before the & Sales for first year Sales increase per year 10) Operating cost of Sale ma percent of in Yeart) 13) Marginal Corporate Tax Rate 13 Cow of Capital (Decu Rataj Falling data in the cells colored ESTIMATING ni Outiny Cash Flow Co, Teo any De new year Investments 1) Equipment cost 2) Shipping and Install cost Tot Basis Cost (1+2+3) 4) Net Working Capital Total In Outlay Operations Operating cost 200 000 $ (120.000) S 210.000 $ (125,000) $ 220 500$ (132,300) $ (138.915) 29.400 5 4 Add back Depreciation Total Operating Cash Flow Terminales: - 1) Change in net WC 512) Salvage valueer tax) Case and Template Response