Need assistance with the 2 problems attached within the document. These are associated withusing MACRS depreciation method. Please show all work within excel!

Due by Friday 8pm!

The Siclan Company is considering opening a new office. The company owns the building and would sell it for $74,000 after taxes if it does not open the new office. The building has been depreciated down to a zero book value. The equipment that will be used in the building costs $69,000. The equipment that would be used has a 3 year tax life, depreciated straight-line, with 0 scrap value. (If the company tried to sell the equipment at end of year 3, it would receive 0 sales proceeds). No new working capital is required. WACC = 15% Due to opening the office and using the equipment, additional annual Revenues = $100,000 Additional annual Operating cost, excluding depreciation = $20,000 Tax rate = 30% a. What is the required cash outflow associated with the acquisition of a new machine at t = 0? b. What is the project's NPV? c. Rework the same problem for Siclan company using MACRS depreciation method instead of straight line depreciation. The equipment that would be used has a 3 year tax life, depreciated using MACRS, with a 0 salvage value. No new working capital is required. What is the project NPV? Remember that Equipment with a 3-year tax life is depreciated over 4 calendar years under MACRS (due to the MACRS -year convention). Note: If you scrap the equipment after 3 years, then you would get a tax reduction due to the fact that you had not fully depreciated the machine before you \"scrapped\" it. 2. Buckeye Books - another Capital Budgeting Problem Buckeye Books is considering opening a new production facility in Toledo. The firm uses free cash flow discounted by the cost of capital. The firm has the following information: The up-front cost of the facility at t=0 is $10 million. The facility will be depreciated on a straight line basis to 0 over 5 years. The company will operate the facility for 5 years. It can be sold for $3 million at t=5. Interest expense will increase by $50,000/year with this project. The firm spent $750,000 on a feasibility study a year and a half ago. The study concluded that opening a new facility would be profitable. If the facility is opened, Buckeye will need additional inventory at t=0 of $2 million. Accounts payable will increase by $1 million at t=0. All working capital will be recovered at t=5. If the facility is opened, it will increase sales by $7 million/year in year 1 and costs will increase by $3 million/year. Inflation is expected to be 4%/year for the life of the project. Inflation will not impact year 1 revenues and costs, but will impact revenues and costs in years 2-5. The tax rate is 40%. If the project is not done, the land on which the facility would be built will be sold for $5 million immediately. Compute the cash flows for years 0, 1, 5 (You can compute the cash flows for years 2, 3, 4, also, if you wish.) If you have computed the cash flows for all years 0-5, then you can find the IRR and MIRR. You can also find the NPV, if we give you a required return (WACC)