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please show excel formulas Webmasters.com has developed a powerful new server that would be used for corporations Internet activities. It would cost $10 million at

please show excel formulas

Webmasters.com has developed a powerful new server that would be used for corporations Internet activities. It would cost $10 million at Year 0 to buy the equipment necessary to manufacture the server. The project would require net working capital at the beginning of each year in an amount equal to 10% of the year's projected sales; for example, NWC0 = 10%(Sales1). The servers would sell for $24,000 per unit, and Webmasters believes that variable costs would amount to $17,500 per unit. After Year 1, the sales price and variable costs will increase at the inflation rate of 3%. The companys nonvariable costs would be $1 million at Year 1 and would increase with inflation.

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Key Results: NPV = IRR Payback = = Input Data (in thousands of dollars) Equipment cost Net operating working capital/Sales First year sales (in units) Sales price per unit Variable cost per unit (excl. depr.) Nonvariable costs (excl. depr.) Market value of equipment at Year 4 Tax rate WACC Inflation in prices and costs Estimated salvage value at year 4 $10,000 10% 1,000 $24.00 $17.50 $1,000 $500 40% 10% 3.0% $500 0 1 2 3 4 Intermediate Calcs (Base) Units sold Sales price per unit (excl. depr.) Variable costs per unit (excl. depr.) Nonvariable costs (excl. depr.) Sales revenue Required level of net operating working capital Basis for depreciation Annual equipment depr. rate Annual depreciation expense Ending Bk Val: Cost - Accum Dep'rn Salvage value Profit (or loss) on salvage Tax on profit (or loss) Net cash flow due to salvage $10,000 20.00% 32.00% 19.20% 11.52% $10,000 $500 Years

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