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2 Spreadsheet Breldre The paragraphs below include information that will be incorporated over a series of assignments during the last 5-6 weeks of the semester See TO DO* section for Instructions on Damon Corporation sont equipment manufacturer, bara maihine currently in use that was originally purchased an of $125.000 The fim deprecates the inde under MACHS in year icovery period 8. Once and deanap cott we taken into consideration, the expected net selling price for the present machine will be 570.000 Damon can buy a new machine for a ne price of $170,000 including installation costs of $15.000 10 The proposed machine will be deprecated under MACRS at recovery period of the firm the new 11 machine swing capital dihan Accounts receivable will increase $15,000, Inventory will increase 519.000, 12 and accounts payable will not 10.000 13 Caring berdepredate interest and taxes (EDIT for the present machine respected to be $95.000 for each of 14 years for the proposed machine the expected to for each of the next years are $105.com 15 S11.000, 5120,000, 5120.000, and $120.000 spectively. The corporate as rate it for the time 40 10 17 h 42 un 120 contains the applicable MACRS depan pes) 10 19 Damon probabile te guidate the machine the end of yearble life for 524.000 20 minmiddeanup to the machine is expected to opon liquidation at the end of a 21 Omonpetstore.it big catalment upon termination of the project. The main 22 te 24 TO DO FOR PANT A Complete the wedbet taskulate the initial investment for the project, Camolete the spreadsheet to calculate the Termine how for the project cComplete the spreadsheet totalete the relevant flows for the project. Then calidate the Net Present Value of the stream of showing a cost of capital of S. Make an investment dedion on whether Damun Corporation should invest in the new machine or not Net gain The Damon Corporation 2 Calculation of the Terminal Cash Flow 3 4 After-tax proceeds from sale of proposed machine 5 Proceeds from sale of proposed machine $ 24,000 6 Book value as of end of year 5 8,500 7 15,500 8 Tax on gain 30% 4,650 9 Total after-tax proceeds - proposed $ 19,350 = proceeds - tax 10 11 After-tax proceeds from sale of present machine 12 Proceeds from sale of present machine 92.125 13 Book value as of end of year 5 0:250 14 85,875 15 Tax on gain 30% 25.763 16 Total after-tax proceeds - present 66,363 = proceeds - tax 17 18 Change in net working capital $(47,013 just reverse initial cost 19. 20 Terminal Cash Flow 21 22 23 indicates cells where you must enter the appropriate formula 24 indicates cells where you must enter a given number 25 (other cells have had numbers or formulas left in for you) 26 27 Net gain A 2 Spreadsheet Breldre The paragraphs below include information that will be incorporated over a series of assignments during the last 5-6 weeks of the semester See TO DO* section for Instructions on Damon Corporation sont equipment manufacturer, bara maihine currently in use that was originally purchased an of $125.000 The fim deprecates the inde under MACHS in year icovery period 8. Once and deanap cott we taken into consideration, the expected net selling price for the present machine will be 570.000 Damon can buy a new machine for a ne price of $170,000 including installation costs of $15.000 10 The proposed machine will be deprecated under MACRS at recovery period of the firm the new 11 machine swing capital dihan Accounts receivable will increase $15,000, Inventory will increase 519.000, 12 and accounts payable will not 10.000 13 Caring berdepredate interest and taxes (EDIT for the present machine respected to be $95.000 for each of 14 years for the proposed machine the expected to for each of the next years are $105.com 15 S11.000, 5120,000, 5120.000, and $120.000 spectively. The corporate as rate it for the time 40 10 17 h 42 un 120 contains the applicable MACRS depan pes) 10 19 Damon probabile te guidate the machine the end of yearble life for 524.000 20 minmiddeanup to the machine is expected to opon liquidation at the end of a 21 Omonpetstore.it big catalment upon termination of the project. The main 22 te 24 TO DO FOR PANT A Complete the wedbet taskulate the initial investment for the project, Camolete the spreadsheet to calculate the Termine how for the project cComplete the spreadsheet totalete the relevant flows for the project. Then calidate the Net Present Value of the stream of showing a cost of capital of S. Make an investment dedion on whether Damun Corporation should invest in the new machine or not Net gain The Damon Corporation 2 Calculation of the Terminal Cash Flow 3 4 After-tax proceeds from sale of proposed machine 5 Proceeds from sale of proposed machine $ 24,000 6 Book value as of end of year 5 8,500 7 15,500 8 Tax on gain 30% 4,650 9 Total after-tax proceeds - proposed $ 19,350 = proceeds - tax 10 11 After-tax proceeds from sale of present machine 12 Proceeds from sale of present machine 92.125 13 Book value as of end of year 5 0:250 14 85,875 15 Tax on gain 30% 25.763 16 Total after-tax proceeds - present 66,363 = proceeds - tax 17 18 Change in net working capital $(47,013 just reverse initial cost 19. 20 Terminal Cash Flow 21 22 23 indicates cells where you must enter the appropriate formula 24 indicates cells where you must enter a given number 25 (other cells have had numbers or formulas left in for you) 26 27 Net gain A