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plz help with part c and d. can you put the numbers are needed I only need the fill the schedule provided from the homework
plz help with part c and d. can you put the numbers are needed I only need the fill the schedule provided from the homework
Project 1: A bicycle manufacturer has an opportunity to begin making a new higherend model which has additional features from the models they currently make. To manufacture the required parts for the new model, the company will need new machinery. Because of the risk level involved in taking on a new product, management is trying to determine whether the returns will justify the risk Members of management are evaluating the project and have determined a 11% discount rate is appropriate for evaluation purposes. To aid management in their decision-making process, your supervisor has asked you to prepare an analysis of the project giving the following information and assumptions: 1} The new equipment will have a cost of $385,000, a salvage value of $35,000 and a 7year useful life. Straight line depreciation will be used. The projected revenues, costs, and results for each of the 7 years of this project are as follows: Sales $394,000 Less: Manufacturing costs $255,000 Depreciation 50,000 Shipping costs 27,600 Administrative costs 14,400 Income before income taxes Income tax expense Net income Instructions: Using the template below, a} compute the annual rate of return. b} compute the payback period. c} compute the NPV using the determined 11% discount rate. is this proposal acceptable using this discount rate? cl} compute the NPV using a 14% discount rate so that Management has a comparison for analysis. is this proposal acceptable using this discount rate? a) Compute the annual rate of return. net profit $35,250 intial investment 385,000 annual rate of return 9.16% 2 b) Compute the payback period. Note that you will need to arrive at the net annual cash flow FIRST. net profit $35,250 cash expense 50,000 Net annual cash flows 85,250 1 initial cash outflow 385,000 annual cash inflow 85,250 Payback period 4.52c) Compute the NPV using the discount rate of 11% and the PV Excel formula. You should list out your inputs in the provided spaces. Present value of cash inflows: N N Present value of cash outflows: Net present value Is this proposal acceptable using this discount rate? Respond Yes or No. 2d) Compute the NPV using the discount rate of 14% and the PV Excel formula where required. You should list out your inputs in the provided spaces. Present value of cash inflows: N N Present value of cash outflows: Net present value Is this proposal acceptable using this discount rate? Respond Yes or No. No 2Step by Step Solution
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