Please show me the calculation of following (a) - (d)

Expected cash flow	(a)
Less cost of defaults	119.8
Net expected cash flow	(b)
Year 1 Customers	500,000
Year 1 Revenue	#VALUE!
Year 2 NPV
Year 2 Customers	1,000,000
Year 2 Revenue	#VALUE!
Year 3 NPV	(d)
Year 3 Customers	2,000,000
Year 3 Revenue	#VALUE!
Total Revenue 3 years	#VALUE!

POProfessor%20SFI/Harvard Yozubusiness o20case/Best o20Buy.pdf 3. Innovating on the Business Model (Rent-to-Own Model) Millennial customers were increasingly shifting from a product ownership to a product sharing mindset. The desire for convenience and lower disposable income fueled the rental culture exemplified by the emergence of services such as Zipcar (car-renting), Spotify (music), Uber (ride- sharing), AirBnb (home rentals), Rent-the-Runway (fashion), and Divvy Bike (bike-sharing). Millennials liked the rental model because it made the latest products and gadgets more affordable and allowed them to try out a product before committing to a purchase. Best Buy saw an opportunity to create a rent-to-own (RTO) model that would take advantage of its extensive physical presence and would be difficult for Amazon to replicate. It could rent consumer electronics, specifically smartphones. With service providers such as Verizon and AT&T looking to move away from phone subsidies and leaving customers to independendy acquire their own devices, Best Buy could step into the void. It could offer the latest, most popular smartphones for a monthly rental fee, with an option to buy the phone at any time during or after the rental period. The RTO arrangement would involve leasing an electronics product to a customer, who would make monthly payments in exchange for immediate access to the product. The RTO lease would also include a purchase provision that would allow the customer to own the product after a predetermined number of payments had been made to the retailer. The RTO model would be particularly attractive to customers with poor credit, because credit checks were not required for an RTO lease. It would also benefit customers on right budgets who could not afford to pay upfront for high-end smartphones. The RTO model for smartphones would work as follows: Customers could lease a high-end smartphone such as the Apple iPhone 6 or the Samsung Galaxy S6 (with a retail price of $649) for a monthly fee of $30 with a minimum term of 12 months. After the minimum term, customers would have three options: (1) buy the leased phone for $499: (2) continue leasing the phone for $30/month; or (3) return the leased phone to Best Buy. It was estimated that 25 percent of customers would buy the phone, 25 percent would return the phone, and the remaining 50 percent would keep leasing the phone for an average of 24 months, after which they would return the phone to Best Buy. Best Buy would sell the returned used phones in the secondary market at the depreciated price. The new phones would cost Best Buy an average of $599 to acquire. The depreciated value of the phones that Best Buy could realize was estimated at $449 at the end of 12 months and $249 at the end of 18 months. Due to the risky nature of the customers who would be attracted to the RTO arrangement, it was estimated that 20 percent of the phones rented under this arrangement would be lost to defaults. In the case of a default, Best Buy would need to write off the entire cost of buying the phone. Best Buy estimated that 0.5 million customers would sign up for the RTO model in the first year, 1 million in the second year, and 2 million in the third year. Best Buy would apply an annual discount rate of 12 percent to calculate the net present value of the cash flows from the RTO model. Financials POProfessor%20SFI/Harvard Yozubusiness o20case/Best o20Buy.pdf 3. Innovating on the Business Model (Rent-to-Own Model) Millennial customers were increasingly shifting from a product ownership to a product sharing mindset. The desire for convenience and lower disposable income fueled the rental culture exemplified by the emergence of services such as Zipcar (car-renting), Spotify (music), Uber (ride- sharing), AirBnb (home rentals), Rent-the-Runway (fashion), and Divvy Bike (bike-sharing). Millennials liked the rental model because it made the latest products and gadgets more affordable and allowed them to try out a product before committing to a purchase. Best Buy saw an opportunity to create a rent-to-own (RTO) model that would take advantage of its extensive physical presence and would be difficult for Amazon to replicate. It could rent consumer electronics, specifically smartphones. With service providers such as Verizon and AT&T looking to move away from phone subsidies and leaving customers to independendy acquire their own devices, Best Buy could step into the void. It could offer the latest, most popular smartphones for a monthly rental fee, with an option to buy the phone at any time during or after the rental period. The RTO arrangement would involve leasing an electronics product to a customer, who would make monthly payments in exchange for immediate access to the product. The RTO lease would also include a purchase provision that would allow the customer to own the product after a predetermined number of payments had been made to the retailer. The RTO model would be particularly attractive to customers with poor credit, because credit checks were not required for an RTO lease. It would also benefit customers on right budgets who could not afford to pay upfront for high-end smartphones. The RTO model for smartphones would work as follows: Customers could lease a high-end smartphone such as the Apple iPhone 6 or the Samsung Galaxy S6 (with a retail price of $649) for a monthly fee of $30 with a minimum term of 12 months. After the minimum term, customers would have three options: (1) buy the leased phone for $499: (2) continue leasing the phone for $30/month; or (3) return the leased phone to Best Buy. It was estimated that 25 percent of customers would buy the phone, 25 percent would return the phone, and the remaining 50 percent would keep leasing the phone for an average of 24 months, after which they would return the phone to Best Buy. Best Buy would sell the returned used phones in the secondary market at the depreciated price. The new phones would cost Best Buy an average of $599 to acquire. The depreciated value of the phones that Best Buy could realize was estimated at $449 at the end of 12 months and $249 at the end of 18 months. Due to the risky nature of the customers who would be attracted to the RTO arrangement, it was estimated that 20 percent of the phones rented under this arrangement would be lost to defaults. In the case of a default, Best Buy would need to write off the entire cost of buying the phone. Best Buy estimated that 0.5 million customers would sign up for the RTO model in the first year, 1 million in the second year, and 2 million in the third year. Best Buy would apply an annual discount rate of 12 percent to calculate the net present value of the cash flows from the RTO model. Financials