n Incorporated is considering a six year project with the following information:

$$ Initial fixed asset investment $$210,000$; straight line depreciation to zero over its

six year life, no residual value

$$ Price: $$180$ per unit

$$ Fixed costs per year: $$720,000($before acquiring the fixed asset above$)$

$$ Units sold per year: $25,500$

$$ Variable cost: $$110$ per unit

$$ Tax rate: $40\%$

Required:

$$ Using Excel, complete each of the following in the same Excel spreadsheet file:

$1.$ Based on the information above, construct a proforma income statement for

Thomson Incorporated $($be sure to include the newly acquired fixed asset$).$ This is

the base case scenario. What is the operating cash flow $($OCF$)$ for each year?

$2.$ Suppose that price, fixed costs, variable costs, and units sold are accurate to

within plus or minus $12\%.$ Construct proforma income statements for both the

worst case scenario and the best case scenario. What is the operating cash flow

$($OCF$)$ for each year under each scenario?

$3.$ Using an Excel formula, compute the Net Present Value for each of the three

scenarios $($base case, worst case, and best case$).$ Use a discount rate of $15\%$ for

each scenario.

$4.$ Using an Excel formula, compute the Internal Rate of Return for each of the

three scenarios $($base case, worst case, and best case$).$

$5.$ Thomson Incorporated will be financing the initial investment of $$210,000$ by

issuing a bond with a face value of $$200,000.$ The bond pays an annual coupon

rate of $15\%$ and will mature in six years. Using an Excel formula. Compute the cond yeild