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Please show your answers in excel as shown below. sales are expected to increase by 12% in year 5, and then decrease by 21% in

Please show your answers in excel as shown below.

image text in transcribedimage text in transcribed

sales are expected to increase by 12% in year 5, and then decrease by 21% in years 6 and 7 - already completed

"Assuming sales revenue per unit, variable cost per unit, and cash fixed costs all increase by the rate of inflation' - already completed

I need help finishing my table and answering the last two parts of this problem.

(1) Finish the table

part (2) What is the net present value of this project?

a. -5523.6

b. 43850.62

. 42990.8

d. 42130.98

part (3) The Firm has the option to abandon the project and sell its specialized equipment at the end of year 8 for $4189.25.

What is the new NPV of the project?

a. 44747.4

b. 42130.98

-44747

d. -42130.98

\begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|} \hline & Year 0 & Year 1 & Year 2 & Year 3 & Year 4 & Year 5 & Year 6 & Year 7 & & & \\ \hline Key Assumptions & & & & & & & & & Assumptions & & \\ \hline Unit Sales & & =M3 & =C3(1+$M$4) & =D3(1+$M$4) & =E3(1+$M$4) & =F3(1+12%) & =G3(121%) & =H3(121%) & & Unit Sales & 8275 \\ \hline Inflation Rate & & =M5 & =C4 & =D4 & =E4 & =F4 & =G4 & =H4 & & Sales Growth (Years 1-4) & 0.07 \\ \hline Real Cost of capital & & =M6 & =C5 & =D5 & =E5 & =F5 & =G5 & =H5 & & Inflation Rate & 0.02 \\ \hline \multirow[t]{2}{*}{ Tax Rate } & & =M7 & =C6 & =D6 & =E6 & =F6 & =G6 & =H6 & & Real Cost of Capital & 0.11 \\ \hline & & & & & & & & & & Tax Rate & 0.22 \\ \hline Discounting & & & & & & & & & & Sales Reveune/Unit & 10.79 \\ \hline Discount Rate = Cost of Capital & & & & & & & & & & Variable Cost/Unit & 7.23 \\ \hline \multirow[t]{2}{*}{ Cumulative Discount Factor } & & & & & & & & & & Cash Fixed Cost & 8676 \\ \hline & & & & & & & & & & Investment & 50271 \\ \hline \multicolumn{12}{|l|}{ Price or Cost / Unit } \\ \hline Sales Revenue / Unit & & =M8 & =C13(1+D4) & =D13(1+E4) & =E13(1+F4) & =F13(1+G4) & =G13(1+H4) & =H13(1+4) & & & \\ \hline Variable Cost / Unit & & =M9 & =C14(1+D4) & =D14(1+E4) & =E14(1+F4) & =F14(1+G4) & =G14(1+H4) & =H14(1+4) & & & \\ \hline Cash Fixed Costs & & =M10 & =C15(1+D4) & =D15(1+E4) & =E15(1+F4) & =F15(1+G4) & =G15(1+H4) & =H15(1+4) & & & \\ \hline \multicolumn{12}{|l|}{ Cash Flow Forecasts } \\ \hline Sales Revenue & & =C13C3 & =D13D3 & =E13E3 & =F13F3 & =G13G3 & =H13H3 & =1133 & & & \\ \hline Variable Costs & & =C14C3 & =D14 D3 & = E14*E3 & =F14F3 & =G14G3 & =H14H3 & =1413 & & & \\ \hline Gross Margin & & =C18C19 & =D18D19 & =E18E19 & =F18F19 & =G18G19 & =H18H19 & =18119 & & & \\ \hline & & & & & & & & & & & \\ \hline Cash Fixed Costs & & =C15 & =D15 & =E15 & =F15 & =G15 & =H15 & =115 & & & \\ \hline \multicolumn{12}{|l|}{ Depreciation } \\ \hline Total Fixed Cost & & =C22+C23 & =D22+D23 & =E22+E23 & =F22+23 & =G22+G23 & =H22+H23 & =122+123 & & & \\ \hline Operating Profit & & =C20C24 & =D20D24 & = E20-E24 & =F20F24 & =G20G24 & =H20H24 & =120124 & & & \\ \hline Taxes & & =C26C6 & =D26D6 & =E26E6 & =F26F6 & =G26G6 & =H26H6 & =12616 & & & \\ \hline Net Profit & & =C26C27 & =D26D27 & =E26E27 & =F26F27 & =G26G27 & =H26H27 & =126127 & & & \\ \hline 8 & & & & & & & & & & & \\ \hline Add Back Depreciation & & =C23 & =D23 & =E23 & =F23 & =G23 & =H23 & =123 & & & \\ \hline Operating Cash flow & & =C28+C30 & =D28+D30 & =E28+E30 & =F28+F30 & =G28+G30 & =H28+H30 & =128+130 & & & \\ \hline Investment & =M11 & & & & & & & & & & \\ \hline Cash Flows & & = C31 & =D31 & =E31 & =F31 & =G31 & =H31 & =131 & & & \\ \hline Present Value of Each Cash Flow & & & & & & & & & & & \\ \hline Net Present Value & & & & & & & & & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|} \hline & Year 0 & Year 1 & Year 2 & Year 3 & Year 4 & Year 5 & Year 6 & Year 7 & & & \\ \hline Key Assumptions & & & & & & & & & Assumptions & & \\ \hline Unit Sales & & =M3 & =C3(1+$M$4) & =D3(1+$M$4) & =E3(1+$M$4) & =F3(1+12%) & =G3(121%) & =H3(121%) & & Unit Sales & 8275 \\ \hline Inflation Rate & & =M5 & =C4 & =D4 & =E4 & =F4 & =G4 & =H4 & & Sales Growth (Years 1-4) & 0.07 \\ \hline Real Cost of capital & & =M6 & =C5 & =D5 & =E5 & =F5 & =G5 & =H5 & & Inflation Rate & 0.02 \\ \hline \multirow[t]{2}{*}{ Tax Rate } & & =M7 & =C6 & =D6 & =E6 & =F6 & =G6 & =H6 & & Real Cost of Capital & 0.11 \\ \hline & & & & & & & & & & Tax Rate & 0.22 \\ \hline Discounting & & & & & & & & & & Sales Reveune/Unit & 10.79 \\ \hline Discount Rate = Cost of Capital & & & & & & & & & & Variable Cost/Unit & 7.23 \\ \hline \multirow[t]{2}{*}{ Cumulative Discount Factor } & & & & & & & & & & Cash Fixed Cost & 8676 \\ \hline & & & & & & & & & & Investment & 50271 \\ \hline \multicolumn{12}{|l|}{ Price or Cost / Unit } \\ \hline Sales Revenue / Unit & & =M8 & =C13(1+D4) & =D13(1+E4) & =E13(1+F4) & =F13(1+G4) & =G13(1+H4) & =H13(1+4) & & & \\ \hline Variable Cost / Unit & & =M9 & =C14(1+D4) & =D14(1+E4) & =E14(1+F4) & =F14(1+G4) & =G14(1+H4) & =H14(1+4) & & & \\ \hline Cash Fixed Costs & & =M10 & =C15(1+D4) & =D15(1+E4) & =E15(1+F4) & =F15(1+G4) & =G15(1+H4) & =H15(1+4) & & & \\ \hline \multicolumn{12}{|l|}{ Cash Flow Forecasts } \\ \hline Sales Revenue & & =C13C3 & =D13D3 & =E13E3 & =F13F3 & =G13G3 & =H13H3 & =1133 & & & \\ \hline Variable Costs & & =C14C3 & =D14 D3 & = E14*E3 & =F14F3 & =G14G3 & =H14H3 & =1413 & & & \\ \hline Gross Margin & & =C18C19 & =D18D19 & =E18E19 & =F18F19 & =G18G19 & =H18H19 & =18119 & & & \\ \hline & & & & & & & & & & & \\ \hline Cash Fixed Costs & & =C15 & =D15 & =E15 & =F15 & =G15 & =H15 & =115 & & & \\ \hline \multicolumn{12}{|l|}{ Depreciation } \\ \hline Total Fixed Cost & & =C22+C23 & =D22+D23 & =E22+E23 & =F22+23 & =G22+G23 & =H22+H23 & =122+123 & & & \\ \hline Operating Profit & & =C20C24 & =D20D24 & = E20-E24 & =F20F24 & =G20G24 & =H20H24 & =120124 & & & \\ \hline Taxes & & =C26C6 & =D26D6 & =E26E6 & =F26F6 & =G26G6 & =H26H6 & =12616 & & & \\ \hline Net Profit & & =C26C27 & =D26D27 & =E26E27 & =F26F27 & =G26G27 & =H26H27 & =126127 & & & \\ \hline 8 & & & & & & & & & & & \\ \hline Add Back Depreciation & & =C23 & =D23 & =E23 & =F23 & =G23 & =H23 & =123 & & & \\ \hline Operating Cash flow & & =C28+C30 & =D28+D30 & =E28+E30 & =F28+F30 & =G28+G30 & =H28+H30 & =128+130 & & & \\ \hline Investment & =M11 & & & & & & & & & & \\ \hline Cash Flows & & = C31 & =D31 & =E31 & =F31 & =G31 & =H31 & =131 & & & \\ \hline Present Value of Each Cash Flow & & & & & & & & & & & \\ \hline Net Present Value & & & & & & & & & & & \\ \hline \end{tabular}

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