Question 5: Part 1. Calculate the cash flow from assets in Row 13. (2 points) Part 2. Using relative and/or absolute cell references, use the PV function to calculate the present value of CFFA for each year in Row 15. If done correctly, I will be able to copy cell C15 and paste it into cells D15:I15 and those cells will display the correct present value.

Similarly, the company will immediately add $50,000 to their cash balance at start-up and then again in year 1 and maintain that higher cash balance over the projects life. The investments in cash and inventory will be recovered when the project is completed.

Below is how I approached the question but it is incorrect.

Year o Revenues $ Variable Costs $ Fixed Costs/Expenses $ EBITDA $ Depreciation EBIT $ $ Taxes $ OCF S Change NWC s (550,000.00 Net Capital Spending $ (4,000,000.00) $ CFFA =(C11+C12) =D10 Year 1 1,950,000.00 $ 390,000.00 $ 120,000.00 $ 1,440,000.00 $ $1,142,857.14 297,142.86 $ 101,028.57 S 1,338,971.43 $ $ $ -E10 Year 2 1,950,000.00 $ 390,000.00 $ 120,000.00 $ 1,440,000.00 $ $816,326.53 623,673.47 $ 212,048.98 $ 1,227,951.02 $ $ $ =F10 Year 3 1,950,000.00 $ 390,000.00 $ 120,000.00 $ 1,440,000.00 $ $583,090.38 856,909.62 $ 291,349.27 $ 1,148,650.73 $ $ $ =G10 Year 4 1,950,000.00 $ 390,000.00 $ 120,000.00 $ 1,440,000.00 $ $416,493.13 1,023,506.87 $ 347,992.34 $ 1,092,007.66 $ $ $ =H10 Year 5 1,950,000.00 $ 390,000.00 $ 120,000.00 $ 1,440,000.00 $ $347,077.61 1,092,922.39 $ 371,593.61 S 1,068,406.39 $ Year 6 1,950,000.00 390,000.00 120.000.00 1,440,000.00 $347,077.61 1,092,922.39 371,593.61 1,068,406.39 Information/Variables $8,000,000.00 Company's Other Taxable income 65000 Units Sold 6 Project Life (years) $ $ 30.00 Price per unit $4,000,000.00 Machinery $ 120,000.00 Machinery maintenance costs 7 Depreciable Life $ 160,000.00 Salvage Value S 500,000.00 Increase in Inventory $ S 50,000.00 Increase in Cash Balance $ 6.00 Marginal Cost (per unit) 149 Cost of Capital 3496 Marginal Tax Rate $ 223,606.39 =110-111+12 PV (CFFA) =PV/K14,02,0,-C13) =PV/K14, D2,0,-D13) =PV/K14, E2.0,-E13) =PV(K14,F2,0,-F13) =PV(K14, G2,0,-G13) =PV/K14,H2,0,-H13) =PV/K14,12,0,-113)