Please show excel formulas and explain, thank you.
it falls to $80,000 due to the heat in the factory. In January 2017, you get an you install the air-conditioning system, the production in the summer months 8. You are the owner of a factory located in a hot tropical climate. The monthly production of the factory is $100,000 except during June-September, when air-conditioning system is $150,000, and its expected life span is 10 years. If offer to install an air-conditioning system in your factory. The cost of the ating the air-conditioning system is $9,000 per month (only in the 4 months that you operate the system). You will also need to pay a maintenance fee The Time Value of oper- of $5,000 annually in October. Also assume that the depreciation costs are recognized in December of each year and that taxes are paid in December of each year. The depreciation is straight-line to salvage value zero (which is also the anticipated terminal value). a. What is the December equivalent pre-tax and pre-depreciation annual profits? b. What is the NPV of purchasing the air-conditioning system if the discount rate is 12% and corporate tax rate is 35%? 9. (Cash-flow analysis) The " D G J E34 Xfx A B 1 AIR CONDITIONING SYSTEM 2 Decountain 12% 3 Corporate tax 35% 4 Air conditioner cost 150,000 5 Airconditioner We span 10 6 Ar conditional annual depreciation 15.000 -84/85 7 Ar conditioner operating cost (une-September 9.000 Monthly Ar conditioner maintenance fee (Oct) 5.000 9 Monthly production addition, June Sept. 20.000 10 11 Discount rate 12% 12 Tax rate 35% 13 Annual calculation Additional Operating output cost Equivalent December cash flow Depreciation 14 15 January 16 February 17 March 18 Apr 19 May 20 June 21 July 22 August 23 September 24 October 25 November 26 December 27 28 Free cash flow (December equivalent) 29 St 30 Calcasion of NPV for the 10 years 31 Year 32 Ar condtioning equipment 33 Free cash flow 34 Temnal value year 10) 35 Adong together ANA 0 2 3 4 10 37 Not presentave it falls to $80,000 due to the heat in the factory. In January 2017, you get an you install the air-conditioning system, the production in the summer months 8. You are the owner of a factory located in a hot tropical climate. The monthly production of the factory is $100,000 except during June-September, when air-conditioning system is $150,000, and its expected life span is 10 years. If offer to install an air-conditioning system in your factory. The cost of the ating the air-conditioning system is $9,000 per month (only in the 4 months that you operate the system). You will also need to pay a maintenance fee The Time Value of oper- of $5,000 annually in October. Also assume that the depreciation costs are recognized in December of each year and that taxes are paid in December of each year. The depreciation is straight-line to salvage value zero (which is also the anticipated terminal value). a. What is the December equivalent pre-tax and pre-depreciation annual profits? b. What is the NPV of purchasing the air-conditioning system if the discount rate is 12% and corporate tax rate is 35%? 9. (Cash-flow analysis) The " D G J E34 Xfx A B 1 AIR CONDITIONING SYSTEM 2 Decountain 12% 3 Corporate tax 35% 4 Air conditioner cost 150,000 5 Airconditioner We span 10 6 Ar conditional annual depreciation 15.000 -84/85 7 Ar conditioner operating cost (une-September 9.000 Monthly Ar conditioner maintenance fee (Oct) 5.000 9 Monthly production addition, June Sept. 20.000 10 11 Discount rate 12% 12 Tax rate 35% 13 Annual calculation Additional Operating output cost Equivalent December cash flow Depreciation 14 15 January 16 February 17 March 18 Apr 19 May 20 June 21 July 22 August 23 September 24 October 25 November 26 December 27 28 Free cash flow (December equivalent) 29 St 30 Calcasion of NPV for the 10 years 31 Year 32 Ar condtioning equipment 33 Free cash flow 34 Temnal value year 10) 35 Adong together ANA 0 2 3 4 10 37 Not presentave
