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Glacier Creek Textiles is planning to purchase new manufacturing equipment. The equipment has an acquisition cost of $100,000, an estimated useful life of five years

Glacier Creek Textiles is planning to purchase new manufacturing equipment. The equipment has an acquisition cost of $100,000, an estimated useful life of five years and no residual value. The company uses a 12% rate of return to evaluate capital projects. The cash flows for the five years:



YearNet Cash OutflowsNet Cash Inflows
Amount invested
0($100,000)
125,000
229,000
326,000
428,000
535,000
Requirements
1. Compute the accounting rate of return.
2. Compute the net present value of the investment using Excel's PV function.
3. Compute the net present value of the investment using Excel's NPV function.
4. Compute the profitability index, rounded to two decimal places.
5. Compute the internal rate of return of the investment using Excel's IRR function. Display to two decimal places, but do not round.
Excel Skills
1. Function PV
2. Function NPV
3. Function IRR

Evaluate Glacier Creek Textiles' new manufacturing equipment.
Data
Annual discount Rate0.12
Cash Flow Year 0 (Cost)(100,000)
Cash Flow Year 125,000
Cash Flow Year 229,000
Cash Flow Year 326,000
Cash Flow Year 428,000
Cash Flow Year 535,000
Useful Life in years5
Residual value0
Requirement 1Compute the Accounting Rate of Return
Average annual operating incomeAverage amount investedAccounting Rate of Return - ARR
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Requirement 2Compute the net present value of the investment using Excel's PV function.
PeriodCash Flows
1(22,321)Note: The first period is shown as an example.
2xxxxxxxx
3xxxxxxxx
4xxxxxxxx
5xxxxxxxx
Present value of net cash flowsxxxxxxxxNote: PV calculates the present value as a negative amount.
Cost of Assetxxxxxxxx
Net Present Valuexxxxxxxx
Requirement 3Compute the net present value of the investment using Excel's NPV function
Present value of net cash flowsxxxxxxxxxx
Cost of assetxxxxxxxxxx
Net Present Valuexxxxxxxxxx
Requirement 4Compute the profitability index, rounded to two decimal places.
Profitability indexxxxxxxxxxx
Requirement 5Compute the internal rate of return of the investment using Excel's IRR function.
Display to two decimal places, but do not round.
IRRxxxxxxxxxNote: IRR requires a negative amount for the investment.

Places with xxxxx's are what needs to be filled in, and it's for excel so if I could see the references to which numbers and the formula used that would be helpful. Thank you!!

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