PLEASE PROVIDE YOUR ANSWERS IN FORMULAS ONLY!!!! NO FIGURES JUST FORMULAS. If you feel the need to post the actual numbers you had, that would be appreciated. but only FORMULAS are required! Thanks

See EXAMPLE of what is expected below. Thanks

Comparison of Capital Budgeting Methods - Excel ? 5 FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Sign In 1 Calibri 11 -AA Wrap Text Accounting Paste BIU Merge & Center - $ % Insert Delete Format Conditional Format as Cell Formatting Table - Styles Styles Clipboard Font Alignment Number Cells D30 - c E F G 5 years 7 B D Laurman, Inc. is considering the following project: 2 Required investment in equipment $ 1,750,000 3 Project life 4 Salvage value 225.000 5 6 The project would provide net operating income each year as follows: Sales $ 2,750,000 8 Variable expenses 1,600,000 9 Contribution margin $ 1,150,000 10 Fixed expenses: 11 Salaries, rent and other fixed out of pocket costs $ 520,000 12 Depreciation 350.000 Total fixed expenses 870,000 14 Net operating income 280.000 15 16 Cost of Capital 18% 17 18 1. Compute the annual net cash inflow from the project. 630,000 19 20 2. Complete the following timeline to compute the net present value of the future cash flows for this project. Don't forget to include the salvage value in year 5. 21 Year 22 0 1 2 3 23 Net cash flow 24 Discount Factor = 1/((1+r)^n) 1.000 25 Present value of the cash flows 4 5 19 5 20 2. Complete the following timeline to compute the net present value of the future cash flows for this project. Don't forget to include the salvage value in year 5. 21 Year 22 0 2 23 Net cash flow 24 Discount Factor = 1/((1+r)^n) 1.000 25 Present value of the cash flows 26 Net present value 27 28 3. Use Excel's NPV function to compute the present value of the cash flows from years 1-5. Do not include the original investment at time zero. 29 NPV of Cash Flows from Years 1-5 30 Deduct the cost of the investment 31 Net present value 32 Write an if/then statement to ACCEPT or REJECT the project based on NPV 34 4. Use Excel's IRR function to compute the project's internal rate of return 35 Write an if/then statement to ACCEPT or REJECT the project based on IRR 37 5. Compute the project's payback period. 36 years 38 39 6. Compute the project's accounting rate of return. 40 41 42 A B Amount 18800 4950 =+B3+B4 00 Amount 19000 =+B9 1 1) 2 Particulars 3 Attachable keyboard 4 Speakers 5 Direct materials 6 7 2) 8 Particulars 9 Assembly worker wages 10 Direct labor 11 12 3) 13 Particulars 14 Factory supervisor's salary 15 Miscellaneous soldering material used to seal case 16 Hourly wages for factory security guard 17 Manufacturing overhead 18 19 4) 20 Particulars 21 Direct materials 22 Direct labor 23 Manufacturing overhead 24 Total manufacturing cost Amount 3300 800 1950 =SUM(B14:B16) Amount =+B5 =+B10 =+B17 |=SUM(B21:B23)