Rossco is considering the purchase of a new computer with the following estimated costs; initial system design , $54,000;hardware , $74,000; software, $35, 000, one time initial training , $11,000; system instillation , $20,000; and file conversion, $12,000. A net reduction of three employees is expected, with average yearly salaries of $40,000. The system will decrease average yearly inventory by $150,000. Annual operating costs will be $30,000 per year.

The expected life of the machine is four years , with an estimated salvage value of zero. the effective tax rate is 40% . All computers purchased will be depreciated using the straight-line method over its four year life. Rossco can invest money made available from the reduction in inventory at its costs of capital of 11%. All cash flows , except for the initial investment and start up costs , are at the end of the year . Assume 365 days in a year .

Required

Use a spreadsheet to perform a feasible analysis to determine whether Rossco should purchase the computer . Compute the following as part of the analysis : initial investment , after tax cash flow for years 1through 4, payback period , net present value , and internal rate of return

This is to help you build your spreadsheets. I need to see formulas where appropriate - Do not just copy values. Thank you so much.