Please show all of the calculation processes.

The manager estimates that the expansion of the business will require an investment in working capital of $43,000. Because the company already has a facility, there would be no additional rent or purchase costs for a building, but the project would generate an additional $405,000 in annual cash overhead. Moreover, the manager expects annual materials cash costs for bicycle parts to be $1,680,000, and labour for the bicycle parts to be about the same as the labour cash costs for furniture parts. The Controller of Mitchell, working with various managers, estimates that the expansion would require the purchase of equipment with a $4,950,000 cost and an expected disposal value of $460,000 at the end of its 10-year useful life. Depreciation would occur on a straight-line basis. The CFO of Mitchell determines the firm's cost of capital as 12%. The CFO's salary is $440,000 per year. Adding another division will not change that. The CEO asks for a report on expected revenue for the project, and is told by the marketing department that it might be able to achieve cash revenue of $4,000,000 annually from bicycle parts. Mitchell Manufacturing has a tax rate of 30%. Present Value of $1 jo. In this table S-$1. (1 + Periods 6% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% 32% 40% Periods 2 2% 0.980 0.961 0.942 0.924 0.906 0.888 0.871 0.853 0.837 0.820 0.804 0.788 0.773 0.758 0.743 0.728 0714 0.700 0.686 0.673 0.660 0.647 0.634 0.622 0.610 0.962 0.925 0.889 0.855 0.822 0.790 0.760 0 0.731 0.703 0.676 0.650 0.625 0.601 0.577 0.555 0.534 0.513 0.4940 0.475 0.456 0.439 0.422 0.406 0.390 0.375 0.943 0.909 0.890 0.857 0.826 0.840 0.794 0.751 0.792 0.735 0.683 0.747 0.681 0.621 0.705 0.630 0.564 .665 0.583 0.513 0.627 0.540 0.467 0.592 0.500 0.424 0.558 0.463 0.386 0.527 0.429 0.350 0.497 0.397 0.319 0.469 0.368 0.290 0.442 0.340 0.263 0.417 0.315 0.239 0.394 0.292 0.218 0.371 0.270 0.198 .350 0.250 0.180 0.331 0 .232 0.164 0.312 0.215 0.149 0.294 0.1990.135 0.278 0.184 0.123 0.262 0.170 0.112 0.247 0.158 0.102 0.2330.146 0.092 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.093 0.083 0.074 0.066 0.059 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.073 0.064 0.056 0.049 0.043 0.038 0.862 0.743 0.641 0.552 0.476 0.410 0.354 0.305 0.263 0.227 0.195 0.168 0.145 0.125 0.108 0.093 0.080 0.0690 0.060 0.051 0.044 0.038 0.003 0.028 0.024 0.847 0.833 0.718 0 .694 0.609 0.579 0.516 0.482 0.437 0.402 0.370 0.335 0.314 0.279 0.266 0.233 0.225 0.194 0.191 0.162 0.162 0.135 0.137 0.112 0.116 0.093 0.099 0.078 0.084 0.065 0.071 0.054 0.060 0.045 .051 0.038 0.043 0.031 0.037 0.026 0.031 0.022 0.026 0.018 0.022 0.015 0.019 0.013 0.0160.010 0.820 0.672 0.551 0.451 0.370 0.303 0.249 0.204 0.167 0.137 0.112 0.092 0.075 0.062 0.051 0.042 0.034 0.028 0.023 0.019 0.015 0.013 0,010 0.008 0.007 0.806 0.650 0.5240 0.423 0.341 0.275 0.222 0.179 0.144 0.116 0.094 0.076 0.061 0.049 0.040 0.032 0.026 0.021 0.017 0.014 0.011 0.009 0.007 0.006 0.005 0.794 0.630 .500 0.397 0.315 0.250 0.198 0.157 0.125 0.099 0.079 0.062 0.050 0.039 0.031 0.025 0.020 0.016 0.012 0.010 0.008 0.006 0.005 0.004 0.003 0.781 0.610 0.477 0.373 0.291 0.227 0.178 0.139 0.108 0.085 0.066 0.052 0.040 0.032 0.025 0.019 0,015 0.012 0.009 0.007 0.006 0.004 0.003 0.003 0.002 0.769 0.758 0.714 0.592 0.574 0.510 0.455 0.435 0.364 0.350 0.329 0.260 0.269 0.250 0.186 0.207 0.189 0.133 0.159 0.143 0.095 0.123 0.108 0.068 0.094 0.082 0.048 0.073 0.062 0.035 0.056 0.047 0.025 0.043 0.006 0.018 0.033 0.027 0.013 0.025 0.021 0.009 0.020 0.016 0.006 0.015 0.012 0.005 0.01200090.003 0.009 0 .007 0.002 0.007 0.005 0.002 0.005 0.004 0.004 0.003 0.001 0.003 0.002 0.001 0.002 0.002 0.000 0.002 0.001 0.000 0.001 0.001 0.000 18 18 1 9 23 24 25 2 3 24 25 Present Value of Annuity $1 in Arrears 1 1 Poli+ Pe='1- Periods 2% Periods 0 2 3 0.980 1.942 2.884 3.808 4.713 5601 6.472 7.325 11 9 % 6% 0.962 0.943 1.886 1.833 2.775 2673 3.630 3.465 4.452 4.212 5242 4917 6.002 5.582 6.733 6.210 7.435 6.802 8.111 7.360 8.760 7.887 9.3858.384 9.986 8.853 10.563 9.295 11.118 9.712 11.652 10.106 12.166 10.477 12.659 10.828 13.134 11.158 13.590 11.470 14.029 11.764 14.45112042 14.857 12.303 15.247 12.550 8.162 8.983 .787 10.575 11.348 12.106 12.849 13.578 14.292 14.992 15.678 16.351 17.011 17.658 18.292 18.914 8% 10% 14% 16% 18% 20% 22% .926 0.909 0.893 0.877 0.862 0.847 0.833 0.820 1.783 1.736 1.690 1.647 1.605 1.566 1.528 1.492 2577 2487 2.402 2.322 2.246 2174 2106 2.042 3.312 3.170 3.037 2.914 2.798 2.690 2.589 2.494 3.993 3.791 3.605 3.433 3.274 3.127 2.991 2.864 4.623 4.355 4.111 3.8893.685 3498 3.3263.167 5.206 4.868 4.288 4.009 3.812 3.605 3.416 5.747 5.335 4.968 4.639 4.344 4.078 3.837 3.619 6.247 5.759 5.328 4.946 4,607 4.303 4,031 3.786 6.710 6.145 5.6505.216 4.833 4.494 4.192 3.923 7.139 6.495 5.938 5.453 5.029 4.656 4.327 4.035 7.536 6.814 6.194 5.660 5.197 4.793 4.439 4.127 7904 7.10 6.4245 842 5.3424 910 4.522 4.203 8.244 7.367 6.6286 .0025.468 5.008 4.611 4.265 8.599 7.606 6.811 6.142 5.575 5.092 4.675 4.315 8.851 7.824 6.974 6.265 5.668 5.162 4.730 4.357 9.122 8.022 7.120 6 .373 5.749 5.222 4.775 4.391 9.3728.2017.250 6.467 5.818 5.2734.812 4.419 9.604 8.365 7.366 6.550 5.877 5.316 4.843 4.442 9.818 8.514 7.4696.623 5.929 5.353 4.870 4.460 10.017 8.6497.562 6.6875.9735.384 4.891 4.476 10. 2018.772 76456 .743 6.0115 .410 4.909 4.488 10.371 8.8837.718 6.7926.044 5.432 4.925 4.499 10.529 8.985 7.784 6.835 6.073 5.451 4.937 4.507 24% 26% 0.806 0.794 1.457 1.424 1,981 1.923 2.404 2320 2.745 2625 3.0202885 3.242 3.083 3.421 3.241 3.566 3.366 3.682 3.465 3.776 3.543 3.851 3.606 3.912 3.656 3.962 3.695 4.001 3.726 4.033 3.751 4.059 3.771 4.080 3.786 4.097 3.799 4.110 3.808 4.121 3.816 4.130 3.822 4.137 3.827 4.143 3.831 28% 30% %2% 40% 0.781 0.769 0 .758 0.714 1.392 1.361 1.331 1.224 1.868 1.816 1.766 1.589 2.241 2.166 2.096 1.849 2.532 2.436 2.345 2.035 2.75926432534 2.168 2.937 2.802 2.677 2.263 3.076 2.925 2.786 2.331 3.184 3.019 2.868 2.379 3.269 3.092 2.930 2.414 3.335 3.147 2.978 3.387 3.190 3.0132456 3.427 3.223 3.040 2.469 3.459 3.2493,061 2.478 3.483 3.268 3.076 2.484 3.503 3.283 3.088 2.489 3.518 3.295 3.097 2.492 3.5293.304 3.104 2.494 3.539 3.311 3.109 2.496 3.546 3.316 3.113 2.497 3.551 3.320 3.116 2.498 3.556 3323 3.118 2.498 3.559 3.325 3.1202.499 3.562 3.327 3.121 2.499 13 14 17 18 18 21 21 1. Separate the cash flows into four groups: (1) net initial investment cash flows, (2) cash flows from operations, (3) cash flows from terminal disposal of investment, and (4) cash flows not relevant to the capital budgeting problem. 2. Calculate the NPV of the expansion project and comment on your analysis. Mitchell Manufacturing manufactures over 20,000 different products made from metal, including building materials, tools, and furniture parts. The manager of the Furniture Parts division has proposed that his division expand into bicycle parts as well. The Furniture Parts division currently generates cash revenues of $4,750,000 and incurs cash costs of $3,650,000, with an investment in assets of $12,050,000. One-quarter of the cash costs are direct labour. A (Click the icon to view the additional information.) 5 (Click the icon to view the present value of $1 factors.) 3 (Click the icon to view the present value annuity of $1 factors.) Required Click the icon to see the Worked Solution. Requirement 1. Separate the cash flows into four groups: (1) net initial investment cash flows, (2) cash flows from operations, (3) cash flows from terminal disposal of investment, and (4) cash flows not relevant to the capital budgeting problem. First identify and calculate the net initial investment cash flows. (Use parentheses or a minus sign for cash outflows.) Net initial investment Initial equipment investment $ Initial working-capital investment (4,950,000) (43,000) (4,993,000) $ Net initial investment Now identify and calculate the cash flows from operations. (Use parentheses or a minus sign for cash outflows.) Cash flows from operations "$ Cash revenues Material cash costs Direct labour cash costs 4,000,000 (1,680,000) (912,500) (405,000) 1,002,500 (300,750) Increase in cash overhead costs Annual cash flows from operations with new equipment Deduct: Income-tax payments Annual after-tax cash flows from operations $ Add: Income-tax cash savings from annual depreciation 701,750 134,700 836,450 Total cash flows from operations (after-tax) Now identify and calculate the cash flows from the terminal disposal of investment. (Use parentheses or a minus sign for cash outflows.) Terminal disposal of investment Terminal disposal of equipment Terminal disposal of working capital 460,000 43,000 503,000 $ Cash flow from terminal disposal of investment Now identify the cash flows that are not relevant to the capital budgeting of this situation. Select all that apply. *A. Costs of the furniture parts division except for direct labour CYB. The revenues in the furniture parts division I C. Increase in cash overhead costs *D. CFO salary E. Direct labour costs of the furniture parts division *F. The investment in the furniture parts division Requirement 2. Calculate the NPV of the expansion project and comment on your analysis. First calculate the NPV of the expansion project. (Use factors rounded to three decimal places, X.XXX. Round your final answer to the nearest whole dollar. Use parentheses or a minus sign for a negative NPV.) NPV = $ (105,091) Now comment on the analysis. Since the net present value is negative, this is not a good investment for a company that requires a(n) 12% rate of return. Mitchell should not expand into bicycle parts