Please answer in Excel including formulas and methods thank you so much 123 Inc is considering purchasing a new machine The machine will cost $3,500,000 The machine will be used for a project that lasts 5 years The expected salvage of the machine at the end of the project is $200,000 The machine will be used to produce widgets The marketing department has forecasted that the company will be able to sell 280,000 widgets per year The marketing department believes that the company will be able to charge $25 per widget The production department, has indicated that the variable cost per widget will be $10 The company has forecasted that the incremental fixed costs associated with the project are $280,000 The company believes that the project will require an initial investment in operating net working capital of $90,000 Thereafter, the investment in operating net working capital will be 10 of sales The CCA rate is 30 , the tax rate is 25 , and the required rate of return is 10 Calculate the NPV of the project Using net present value (NPV) calculation, determine if the company should purchase the new machine Show all work Your boss has a number of concerns regarding the project Therefore, she has asked you to determine the number of units that the company must sell each year for the NPV to be greater than zero Your boss has also asked you to determine which input (units sold, price per unit, variable cost per unit, or fixed cost) has the greatest forecasting risk Therefore, your boss has asked you to do a sensitivity analysis Your boss wants you to vary the input forecast by 10 and determine the impact on the NPV of the project Based on this analysis you are to determine which input has the greatest forecasting risk Finally, your boss has asked you to perform a scenario analysis Therefore, your boss has asked to include two new scenarios A pessimistic scenario and an optimistic scenario Your boss wishes to know the NPV of the project under these two additional scenarios The value of the inputs for each scenario are shown in the table below Pessimistic Optimistic Units sold 225,000 350,000 Price per unit $18 $30 Variable cost per unit $12 $7 Fixed Cost $320,000 $200,000

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Please answer in Excel including formulas and methods thank you so much 123 Inc. is considering purchasing a new machine. The machine will cost $3,500,000.

***Please answer in Excel including formulas and methods*** thank you so much

123 Inc. is considering purchasing a new machine. The machine will cost $3,500,000. The machine will be used for a project that lasts 5 years. The expected salvage of the machine at the end of the project is $200,000. The machine will be used to produce widgets. The marketing department has forecasted that the company will be able to sell 280,000 widgets per year. The marketing department believes that the company will be able to charge $25 per widget. The production department, has indicated that the variable cost per widget will be $10. The company has forecasted that the incremental fixed costs associated with the project are $280,000. The company believes that the project will require an initial investment in operating net working capital of $90,000. Thereafter, the investment in operating net working capital will be 10% of sales.

The CCA rate is 30%, the tax rate is 25%, and the required rate of return is 10%.

Calculate the NPV of the project.
Using net present value (NPV) calculation, determine if the company should purchase the new machine. Show all work.
Your boss has a number of concerns regarding the project. Therefore, she has asked you to determine the number of units that the company must sell each year for the NPV to be greater than zero.
Your boss has also asked you to determine which input (units sold, price per unit, variable cost per unit, or fixed cost) has the greatest forecasting risk. Therefore, your boss has asked you to do a sensitivity analysis. Your boss wants you to vary the input forecast by 10% and determine the impact on the NPV of the project. Based on this analysis you are to determine which input has the greatest forecasting risk.
Finally, your boss has asked you to perform a scenario analysis. Therefore, your boss has asked to include two new scenarios. A pessimistic scenario and an optimistic scenario. Your boss wishes to know the NPV of the project under these two additional scenarios. The value of the inputs for each scenario are shown in the table below.