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Please use excel and show formulas. Thank you! 3. Project Cash Flows You have been operating a poke restaurant for a few years, then COVID-19

Please use excel and show formulas. Thank you! image text in transcribed
3. Project Cash Flows You have been operating a poke restaurant for a few years, then COVID-19 hit. You quickly realized that you either go out of business or adapt to the new reality. You decided to adapt to the new reality, which is to join online platforms such as Uber Eats or DoorDash and allow your customers to order online. In conjunction, you will revamp your website and develop your own online ordering system to maintain the profit margin. The new investment in technology and related equipment will cost $25,000. You expect to generate $30,000 each year from online sales, but online sales will cannibalize in-store sales by $13,000 each year. That is some customers who would have ordered in-store are now ordering online Also, there will be a net increase in NWC of $1,500 at the time you begin online sales, but the NWC will reverse in 5 years. The net change in all other expenses (labor, material, overhead, etc.) will be 23% of the net change in sales. You will depreciate the new investment using a 5-year MACRS. At the end of Year 5, you expect to sell the newly acquired equipment for $2,300. Your operation has a marginal tax rate of 23% and its cost of capital is 12.5%. (20 points) 3.1. What is the NPV of this project? 3.2. What is the IRR? 3.3. Should you invest in the online-ordering operation? 3.4. How much will the cannibalization of in-store sales have to be for the NPV to become zero? (Caution: Don't let this question mess up your answers above Show this answer somewhere in the worksheet and write one sentence explaining how you did it Make sure your other answers appear correctly.) The 5-year MACRS Depreciation Schedule: 1 6 Year Annual Depreciation % 2 32.00% 3 19,20% 5 11.52% 20.00% 11.52% 5.76%

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