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Please can you assist me with this question in excel format? Thank you ADVANCED PROBLEMS FOR SPREADSHEET APPLICATION Working capital impact on project. iCovers, Incorporated
Please can you assist me with this question in excel format? Thank you
ADVANCED PROBLEMS FOR SPREADSHEET APPLICATION Working capital impact on project. iCovers, Incorporated wants to make covers for all the products that Apple manufactures. The company is looking at new covers for the iPhone, iPad, iPalm, iThumb, and iEye. The initial investment in capital equipment will be $10,000,000. The projected revenues and costs are: 1 2 3 4 5 6 Re ven ue $10,0 00,00 0 $13,0 00,00 0 $17,0 00,00 0 $23,0 00,00 0 $18,0 00,00 0 $12,0 00,00 0 Var iabl e $ 4,000, 000 $ 5,200, 000 $ 6,800, 000 $ 9,200, 000 $ 7,200, 000 $ 4,800, 000 Fix ed $ 1,500, 000 $ 1,500, 000 $ 1,500, 000 $ 1,500, 000 $ 1,500, 000 $ 1,500, 000 S, G & A $ 1,250, 000 $ 1,400, 000 $ 1,750, 000 $ 2,000, 000 $ 2,000, 000 $ 1,500, 000 The initial investment in working capital is $2,000,000. However, working capital will increase or decrease each year so that it is always 20% of the anticipated revenue for the coming year. The equipment will be depreciated using a MACRS five-year life, and there is no salvage value for the equipment at the end of the six-year project. The tax rate for iCovers is 37%. Using a spreadsheet, set up the project's incremental cash flows showing the initial outlay (both capital and working capital), the operating cash flow each year, and the change in working capital each year. Note that the company will terminate the project in year six. Then calculate the project's IRR and NPV if the project's discount rate is 14%Step by Step Solution
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