Spreadsheet Exercise Damon Corporation , a sports equipment manufacturer , has a machuse in use that was originally purchased 3 years ago 120,000 The machine under MACRS using a - year recovery periol and costs are taken into consideration , the expected ne selling chine will be $ 70,000 . Damon can buy a new inachine for a ner price of $ 160,000 ( including installa tion costs of $ 15,000 ) . The proposed machine will be depreciated under MACRS ing a 5 - year recovery period . If 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 ma chine 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 , $ 110,000 , $ 120,000 , and respectively . The corporate tax rate ( T ) for the firm is 40 % . ( Table 4.2 on page 166 contains the applicable MACRS depreciation percentages . ) Damon expects to be able to liquidate the proposed machine at the end of its - year usable life for $ 24,000 ( after paying removal and cleanup costs ) . The present machine is expected to upon liquidation at the end of the same period . Damon expects to recover net working capital investment upon termination of the project . The firm is subject to a fax rate of 40 % . \$8,00; 11.5, 11.7 TO DO Create a spreadsheet similar to Tables 11.1 , , and 11.9 to answer the following : a . Create a spreadsheet to calculate the initial investment . b . Create a spreadsheet to prepare a depreciation schedule for both the proposed and the present machine . Both machines are depreciated under MACRS using a 5 - year recovery period . Remember that the present machine has only 3 years of depreciation remaining . Create a spreadsheet to calculate the operating cash flows for Damon Corporation for both the proposed and the present machine . d . Create a spreadsheet to calculate the terminal cash flow associated with the project . be clearly and fast and give full screen