some numbers are wrong and I dont know why

A B C D E G H Spreadsheet Exercise The paragraphs below include information that will be incorporated over a series of assignments during the last 5-6 weeks of the semester Seo "TO DO" section for instru Damon Corporation, a sports equipment manufacturer, has a machine currently in use that was originally purchased 3 years ago for $125,000. The firm depreciates the machine under MACRS using a 5-year recovery period Once removal and cleanup costs are taken into consideration, the expected net selling price for the present machine will be $70,000. Damon can buy a new machine for a net price of $170,000 (including installation costs of $15,000). The proposed machine will be depreciated under MACRS using a 5-year recovery period of the firm acquires the new machine its working capital needs will change: Accounts receivable will increase $15,000, inventory will increase $19,000, and accounts payable will increase $16,000. Earnings before depreciation, Interest, and taxes (EBDIT) for the present machine are expected to be $95,000 for each of the successive 5 years. For the proposed machine, the expected EBDIT for each of the next 5 years are $105,000, $110,000, $120,000, $120,000, and $120,000, respectively. The corporate tax rate (t) for the firm is 40% (Table 4.2 on page 120 contains the applicable MACRS depreciation percentages.) Damon expects to be able to liquidate the proposed machine at the end of its 5 year usable life for $24,000 (after paying removal and cleanup costs). The present machine is expected to net 58,000 upon liquidation at the end of same period. Damon expects to recover its net working capital investment upon termination of the project. The firm is subject to a tax rate of 30% TO DO FOR PART 3: A. Complete the spreadsheet to calculate the initial Investment for the project B.Complete the spreadsheet to calculate the Terminal Cash Flows for the project. C. Complete the spreadsheet to calculate the Relevant Cash Flows for the project. Then calculate the Net Present Value of the stream of cash flows, using a cost of capital of 5%. Make an investment decision on whether Damon Corporation should invest in the new machine or not. Problem Details Initial Investment Terminal Cash Flow Al Relevant Cash Flows 2 Calculation of the Initial Investment 3 4 Installed cost of proposed machine 5 Cost of proposed machine 155,000 6 plus: Installation costs 15 000 7 Total installed cost-proposed $ 170,000 8 (depreciable value) 9 10 After-tax proceeds from sale of present machine 11 Proceeds from sale of present machine 70,000 12 less: Tax on sale of present machine 14,500 13 Total after-tax proceeds present $ 55,500 14 15 Change in net working Capital S 18,000 16 17 Initial investment Cash Outflow $ 114,500 18 19 Tax on sale of old machine Change in Working Capital 20 Cost of old machine S 125,000 Increase in receivables $ 15,000 21 MACRS increase in inventory 19,000 22 year 1 20% from depr sched 25,000 increase in payables 16.000 23 year 2 32% 40.000 Net working capital S 18,000 24 19% 23 750 25 Book Value S 36 250 26 27 Sale price of old machine $ 70,000 29 Gain on sale S 33,750 30 Tax rate 30% 31 Tax Expense S 10.125 32 33 34 indicates cells where you must enter the appropriate formula Problem Details Initial Investment Terminal Cash Flow All Relevant Cash Flows year 3 1 2 The Damon Corporation Calculation of the Terminal Cash Flow $ 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 10.200 7 Net gain $ 13,800 8 Tax on gain 40% 4,080 9 Total after-tax proceeds - proposed $ 19,920 = proceeds - tax 10 11 After-tax proceeds from sale of present machine 12 Proceeds from sale of present machine $ 110,125 13 Book value as of end of year 5 0 14 Net gain 55,500 15 Tax on gain 40% 16 Total after-tax proceeds - present $ 110,125 = proceeds - tax 17 18 Change in net working capital just reverse initial 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 Problem Details Initial lavestment Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Initial Investment Incremental Operating Cash Flows 1 Terminal Cash Flow 2 3 Total Cash Flows 4 $ $ $ Enter a CELL REFERENCE to the previous sheets in this workbook 2 Enter the NUMBER from your previous assignment 4 HINT: make sure all the signage is appropriate - negative if an outflow and positive if an inflow 5 Also make sure you understand what each formula is doing! 26 27 Net Present Value (NPV) of the cash flows: Calculate this number using either a financial calculator or with an Excel formula 29 Should Damon Corp invest in the new machine? Enter YES or NO 28 30 31 32 29 A B C D E G H Spreadsheet Exercise The paragraphs below include information that will be incorporated over a series of assignments during the last 5-6 weeks of the semester Seo "TO DO" section for instru Damon Corporation, a sports equipment manufacturer, has a machine currently in use that was originally purchased 3 years ago for $125,000. The firm depreciates the machine under MACRS using a 5-year recovery period Once removal and cleanup costs are taken into consideration, the expected net selling price for the present machine will be $70,000. Damon can buy a new machine for a net price of $170,000 (including installation costs of $15,000). The proposed machine will be depreciated under MACRS using a 5-year recovery period of the firm acquires the new machine its working capital needs will change: Accounts receivable will increase $15,000, inventory will increase $19,000, and accounts payable will increase $16,000. Earnings before depreciation, Interest, and taxes (EBDIT) for the present machine are expected to be $95,000 for each of the successive 5 years. For the proposed machine, the expected EBDIT for each of the next 5 years are $105,000, $110,000, $120,000, $120,000, and $120,000, respectively. The corporate tax rate (t) for the firm is 40% (Table 4.2 on page 120 contains the applicable MACRS depreciation percentages.) Damon expects to be able to liquidate the proposed machine at the end of its 5 year usable life for $24,000 (after paying removal and cleanup costs). The present machine is expected to net 58,000 upon liquidation at the end of same period. Damon expects to recover its net working capital investment upon termination of the project. The firm is subject to a tax rate of 30% TO DO FOR PART 3: A. Complete the spreadsheet to calculate the initial Investment for the project B.Complete the spreadsheet to calculate the Terminal Cash Flows for the project. C. Complete the spreadsheet to calculate the Relevant Cash Flows for the project. Then calculate the Net Present Value of the stream of cash flows, using a cost of capital of 5%. Make an investment decision on whether Damon Corporation should invest in the new machine or not. Problem Details Initial Investment Terminal Cash Flow Al Relevant Cash Flows 2 Calculation of the Initial Investment 3 4 Installed cost of proposed machine 5 Cost of proposed machine 155,000 6 plus: Installation costs 15 000 7 Total installed cost-proposed $ 170,000 8 (depreciable value) 9 10 After-tax proceeds from sale of present machine 11 Proceeds from sale of present machine 70,000 12 less: Tax on sale of present machine 14,500 13 Total after-tax proceeds present $ 55,500 14 15 Change in net working Capital S 18,000 16 17 Initial investment Cash Outflow $ 114,500 18 19 Tax on sale of old machine Change in Working Capital 20 Cost of old machine S 125,000 Increase in receivables $ 15,000 21 MACRS increase in inventory 19,000 22 year 1 20% from depr sched 25,000 increase in payables 16.000 23 year 2 32% 40.000 Net working capital S 18,000 24 19% 23 750 25 Book Value S 36 250 26 27 Sale price of old machine $ 70,000 29 Gain on sale S 33,750 30 Tax rate 30% 31 Tax Expense S 10.125 32 33 34 indicates cells where you must enter the appropriate formula Problem Details Initial Investment Terminal Cash Flow All Relevant Cash Flows year 3 1 2 The Damon Corporation Calculation of the Terminal Cash Flow $ 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 10.200 7 Net gain $ 13,800 8 Tax on gain 40% 4,080 9 Total after-tax proceeds - proposed $ 19,920 = proceeds - tax 10 11 After-tax proceeds from sale of present machine 12 Proceeds from sale of present machine $ 110,125 13 Book value as of end of year 5 0 14 Net gain 55,500 15 Tax on gain 40% 16 Total after-tax proceeds - present $ 110,125 = proceeds - tax 17 18 Change in net working capital just reverse initial 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 Problem Details Initial lavestment Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Initial Investment Incremental Operating Cash Flows 1 Terminal Cash Flow 2 3 Total Cash Flows 4 $ $ $ Enter a CELL REFERENCE to the previous sheets in this workbook 2 Enter the NUMBER from your previous assignment 4 HINT: make sure all the signage is appropriate - negative if an outflow and positive if an inflow 5 Also make sure you understand what each formula is doing! 26 27 Net Present Value (NPV) of the cash flows: Calculate this number using either a financial calculator or with an Excel formula 29 Should Damon Corp invest in the new machine? Enter YES or NO 28 30 31 32 29