MJ Company is considering investing in a machine to produce personalized golf balls. The company hired outside analysts to conduct a thorough analysis of the project's feasibility. Regardless of whether or not the golf ball production proceeds, the company must pay the analysts $$100,000.$

Following are the analysis for the proposed new product:

The golf balls would be manufactured in a building owned by the firm that was already purchased couple years ago. The building can be sold for $$140,000$ after taxes.

Cost of new machine is $$150,000,$ which will be depreciated using $5-$year MACRS for tax purposes. The machine has an estimated market value at the end of five years of $$40,000.$

Production by year during the five$-$year life of the machine is expected to be : $60,000$ units, $80,000$ units, $100,000$ units, $120,000$ units, and $90,000$ units

The price of the personalized golf balls in the first year will be $$4$ per unit, and will increase at $2\%$ per year.

On the other hand, the cost to produce these golf balls in the first year will be $$2\mathrm{.}5$ per unit, and will increase at $8\%$ per year.

The project initially requires $$100,000$ of net working capital that will be fully recovered at the end of the project.

The corporate tax rate is $21\%.$

Question $1-$ Fill in the spreadsheet below to find the operating cash flow $($OCF$).$and include the excel formulas used. Complete each amount for SALES REVENUE $$,$ OPERATING COSTS $$,$ DEPRECIATION, $TAX $(0\mathrm{.}21),$ $NET INCOME, and OCF for years $ $1,2,3,4,$ and $5.$

YEAR $12345$

SALES REVENUE $

OPERATING COSTS $

DEPRECIATION $

TAX $(0\mathrm{.}21)$ $

NET INCOME $

OCF$=$ $

QUESTION #$3.$ Fill in the amounts for years $0,1,2,3,4,5$ in each category below to find the projected Total Cash Flow each year. Do in excel and provide formulas.

YEAR $012345$

CAPITAL SPENDING $

OPPORTUNITY COSTS $

NET WORKING CAPITAL $

PROJECTED TOTAL CF

The Net Present Value of the project with the discount rate of $15\%$ is $35850$

Question $3$: What is the Internal Rate of Return $($IRR$)$ for this project? It's either$14\mathrm{.}60\%,22\mathrm{.}28\%,18\mathrm{.}01\%,$ or $11\mathrm{.}37\%$