**Please show in excel with explanation and formula that would be helpful

The Golden Digital Company has been offered a five-year contract to haul munitions for the government. Since this contract would represent new business, the company would have to purchase several new heavy-duty trucks at a cost of $375,000 if the contract were accepted.Other data relating to the contract follow:

Annual Cash Revenue $ 420,000.-

Annual Cash Expense $ 315,000.-

Cost of replacing the motors in the trucks in the third year $ 25,000.-

Cost of Advertising in the fourth year $ 5,000.-

Salvage value of the trucks at termination of the contract $ 18,000.-

To raise money to assist in the purchase of the new trucks, the company will sell several old, fully depreciated trucks for a total selling price of $30,000. The company requires a 10% return on all equipment purchases (Table 2, 10%). The tax rate is 20%.

REQUIRED

Compute the net present value (NPV) and Internal Rate of Return (IRR) of this investment opportunity. Would you recommend that the contract be accepted?

Financial Table 2 (Present Value)

	6%	8%	10%	12%
1	0.943	0.926	0.909	0.893
2	0.890	0.857	0.826	0.797
3	0.840	0.794	0.751	0.712
4	0.792	0.735	0.683	0.636
5	0.747	0.681	0.621	0.567

NOTE:

Straight Line Depreciation Expense= (Asset Cost - Salvage Value ) / Useful life