Note 1: Please use appropriate Cell referencing in Excel so that your numerical values update when you change any input(s). This will be helpful when you analyze the Best and Worst Case growth rate scenarios. Numerical Inputs expected from you are highlighted in yellow and Formula/Function Inputs are highlighted in blue. Step 1: Read the Full Case. On the "CapitalBudget" Worksheet: Step 2: Calculate the weights of Equity and Weights of Debt for the firm. Use the stock and bond data provided in the case. Step 3: Calculate the Cost of Equity for the firm. Use the CAPM and the Market data provided on on the Worksheet "MarketData". Step 4: Calculate the Cost of Debt for the firm. Use the information provided about the firms bonds to calculate the YTM. Step 5: Calculate the after-tax cost of debt. Use the given tax rate for the firm. Step 6: Use the results from steps 2-5 to calculate the WACC (Weighted Average Cost of Capital) for the firm. Step 7: Input the appropriate Initial Cash Outlays IMPORTANT: All cash inflows need to be POSITIVE and all cash outflows need to be NEGATIVE. Step 8: Input the appropriate Cash flows from Operations Step 9: Input the appropriate Terminal Cash flows. Step 10: Compute the Net Cash flows for Years 04. Step 11: Compute the PV of Net Cash flows for Years 0 - 4. (You can either use the EXCEL formula for PVO or use the mathematical formula for PV of a lump sum) Step 12: Compute the NPV of the Net cash flows - This can be done as the sum of the PV's in Step 11 or using Excels NPV formula. Note 2: Excel's NPV formula needs to be adjusted by a factor of (1+1) - Refer to the module 14 notes on CANVAS for details. Step 13: Indicate the Accept/Reject decision for the most likely scenario. Note 3: Copy and paste the NPV values in cells C48 - C50 as you will need to input the NPV's for the 3 scenarios here - DO NOT REFERENCE values. Step 14: Compute the NPV for the Best Case scenario by changing to the Best Case growth rate in cell B11 and indicate the Accept/Reject. Decision for this scenario. See Note 1 above - This is where it will be helpful. Step 15: Compute the NPV for the Worst Case scenario by changing to the Worst Case growth rate in cell B11 and indicate the Accept/Reject Decision for this scenario. On the "NPVProfile" Worksheet: Step 16: Complete the table to generate a NPV profile for the Most-Likely Scenario. The graph will be automatically generated for you. Note 4: A sample calculation for generating a NPV profile is shown on the NPVProfile worksheet Step 17: Optional - Complete the Worksheet "Answer Sheet" as needed. (see instructions on the sheet) Hint: Explain/Clarify any assumptions or methods used. Note: Use this sheet to convey any comments to the instructor. Step 18: Double check your work Eeronica Sarkozy, the CFO for the firm PSUWC Designer Shoes Company, LLC, woke up with a start at 4:00 am in 12/10/2023, due to the phone ringing. It was the firms senior financial analyst, vacationing in Europe, calling with ad news. Veronica was supposed to present the project evaluation, at the end of the week, for the Board's roposal that they invest in new equipment which would enable them to add a new product line. Currently PSUWC las four successful products and they are considering selling a new Designer Shoes line. The staff of financial analysts had been working hard over the last few weeks collecting data and had prepared a model creating a financial forecast about the proposed project's wiability. Disaster had struck on the night of 12/9/2023 wherein malware all but wiped out the work of the analysts. Veronica needed to prepare a financial analysis of the project to present the Board with recommendations. All the staff had already left for their annual vacation and Veronica was working alone. Veronica quickly reached the office and managed to salvage what was left of the excel spreadsheet prepared for the presentation. What follows is some basic information that Veronica knew and was able to retrieve about the project. PSUWC's existing plant has excess capacity, in a filly depreciated building, to install and tun the new equipment to produce the new Designer Shoes line. Due to relatively rapid advances in technology, the project was expected to be discontinued in four years. The new Designer Shoes was expected to sell for $109 per unit and had projected sales of 4500 units in the first year, with a projected (Most-Likely scenario) 21.0% growth rate per year for subsequent years. A total investment of $729,000 for new equipment was required. The equipment had fixed maintenance contracts of $295,181 per year with a salvage value of $113,858 and variable costs were 8% of revenues. Veronica also needed to consider both the Best-Case and Worst-Case scenarios in the analysis with growth rates of 31.00% and 2.10% respectively. The new equipment would be depreciated to zero using straight line depreciation. The new project required an increase in working capital of $203,840 and $20,384 of this increase would be offset with accounts payable. PSTWC currently has 761000 shares of stock outstanding at a current price of $84.00. Even though the company has outstanding stock, it is not publicly traded and therefore there is no publicly available financial information. However, after analysis management believes that its equity beta is 1.37 . 4 The company also has 122000 bonds outstanding, with a current price of $1,012.00. The bonds pay interest semi- Eeronica Sarkozy, the CFO for the firm PSUWC Designer Shoes Company, LLC, woke up with a start at 4:00 am in 12/10/2023, due to the phone ringing. It was the firms senior financial analyst, vacationing in Europe, calling with ad news. Veronica was supposed to present the project evaluation, at the end of the week, for the Board's roposal that they invest in new equipment which would enable them to add a new product line. Currently PSUWC las four successful products and they are considering selling a new Designer Shoes line. The staff of financial analysts had been working hard over the last few weeks collecting data and had prepared a model creating a financial forecast about the proposed project's wiability. Disaster had struck on the night of 12/9/2023 wherein malware all but wiped out the work of the analysts. Veronica needed to prepare a financial analysis of the project to present the Board with recommendations. All the staff had already left for their annual vacation and Veronica was working alone. Veronica quickly reached the office and managed to salvage what was left of the excel spreadsheet prepared for the presentation. What follows is some basic information that Veronica knew and was able to retrieve about the project. PSUWC's existing plant has excess capacity, in a filly depreciated building, to install and tun the new equipment to produce the new Designer Shoes line. Due to relatively rapid advances in technology, the project was expected to be discontinued in four years. The new Designer Shoes was expected to sell for $109 per unit and had projected sales of 4500 units in the first year, with a projected (Most-Likely scenario) 21.0% growth rate per year for subsequent years. A total investment of $729,000 for new equipment was required. The equipment had fixed maintenance contracts of $295,181 per year with a salvage value of $113,858 and variable costs were 8% of revenues. Veronica also needed to consider both the Best-Case and Worst-Case scenarios in the analysis with growth rates of 31.00% and 2.10% respectively. The new equipment would be depreciated to zero using straight line depreciation. The new project required an increase in working capital of $203,840 and $20,384 of this increase would be offset with accounts payable. PSTWC currently has 761000 shares of stock outstanding at a current price of $84.00. Even though the company has outstanding stock, it is not publicly traded and therefore there is no publicly available financial information. However, after analysis management believes that its equity beta is 1.37 . 4 The company also has 122000 bonds outstanding, with a current price of $1,012.00. The bonds pay interest semi- Company=RiskFreeRate(Rf)=1.370.50% Given the following data on proposed capital budgeting project. S