Required information Excel Analytics 14-1 (Static) Internal Rate of Return (LO14-2, LO14-3) Stauffer Company has an opportunity to manufacture and sell a new product for a five-year period. The company estimated the following costs and revenues for the new product: Cost of new equipment Initial working capital required Overhaul of the equipment after three years Salvage value of the equipment after five years $420,000 $ 80,000 $ 50,000 $ 30,000 Annual revenues and costs: Sales Variable expenses Pixed out-of-pocket operating costs $850,000 $500,000 $200,000 When the project concludes in five years the working capital will be released for investment elsewhere in the company Click here to download the Excel template, which you will use to answer the questions that follow Click here for a brief tutorial on Goal Seek in Excel Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 3A Reg 3B Reg4 Req5 Req6 Req7 5. If the company wants to achieve an 18% return on this investment, what is the maximum amount that it can spend each year on fixed out-of-pocket operating costs? Use Goal Seek to compute your answer. Note: The fixed out-of-pocket operating costs remain constant for all five years, therefore modifying cell Ci3 automatically updates cells D13 through G13. Operating costs $ 195,755 Required information Excel Analytics 14-1 (Static) Internal Rate of Return (LO14-2, LO14-3) Stauffer Company has an opportunity to manufacture and sell a new product for a five-year period. The company estimated the following costs and revenues for the new product: Cost of new equipment Initial working capital required Overhaul of the equipment after three years Salvage value of the equipment after five years $420,000 $ 80,000 $ 50,000 $ 30,000 Annual revenues and costs: Sales Variable expenses Pixed out-of-pocket operating costs $850,000 $500,000 $200,000 When the project concludes in five years the working capital will be released for investment elsewhere in the company Click here to download the Excel template, which you will use to answer the questions that follow Click here for a brief tutorial on Goal Seek in Excel Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 3A Reg 3B Reg4 Req5 Req6 Req7 5. If the company wants to achieve an 18% return on this investment, what is the maximum amount that it can spend each year on fixed out-of-pocket operating costs? Use Goal Seek to compute your answer. Note: The fixed out-of-pocket operating costs remain constant for all five years, therefore modifying cell Ci3 automatically updates cells D13 through G13. Operating costs $ 195,755
