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Quixotic Enterprises is about to embark on another venture Poncho Sanchos, the faithful financial analyst, once again will examine the viability of this venture after

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Quixotic Enterprises is about to embark on another venture Poncho Sanchos, the faithful financial analyst, once again will examine the viability of this venture after 31 failures A number of windmills are to be constructed on the southern frontier to generate electricity. They will cost $494,000 and will last 10 years, at which time they will have an estimated salvage value of $30,000. However, a capital upgrade of $98,000 will be required at the end of five years. An inventory of spare parts (working capital) amounting to $10,000 will be required during the term of the venture and will be housed in a warehouse that is currently not being used, but which has been used for Quixotic's previous ventures. The warehouse could be rented out at $4,000 per year. This enterprise is expected to generate cash from the sale of electricity of $155.000 a year for 10 years Cash expenses for each of the 10 years will be $8,000 The company's tax rate is 28 percent, the CCA rate is 9 percent and the cost of capital is 18 percent Requirements: A Calculate the Net Present Value of the Windmill venture by completing the table below: /You need a number for every cell in this spreadsheet) Event Expected Cash Flow After tax Cash Flow Present Value Enter cash recelets as positive numbers, cash payments as negative numbers Round all your answers 10 20 decimal Places Inital Investment Working Capital Revenues Expenses Opportunity Cost Requirements: A Calculate the Net Present Value of the Windmill venture by completing the table below. (You need a number for every cell in the spreadsheet) Event Expected Cash Flow After-tax Cash Flow Present Value Enter cash receipts as positive numbers, cash payments as negative numbers. Round all your answers to zero decimal places Inital Investment Working Capital Revenues Expenses Opportunity Cost Capital Upgrade Salvage Working Capital Revcovery CCA Tax Shield NIA N/A Net present value NIA B. It's not worth any marks, but it helps with the marking what number did you use for (Cpv - Spv)? (Enter your answer as a positive number) C Should Quixotic dream the impossible dream and invest in the Windmill venture? (Click to select) 89

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