The Clayton Manufacturing company is considering an investment in a new automated inventory system for its warehouse that will provide cash savings to the firm over the next five years. The firms CFO anticipates additional earnings before interest, taxes, depreciation, and amortization, from cost savings equal to 200,000 for the first year of operation of the center, and over the next four years the firm estimates this amount will grow at a rate of 5% per year.

The System will require an initial investment of 800,000 that will depreciate over a five year period using straight line depreciation of 160,000 per year and a zero estimated salvage value. A. A. Calculate the projects annual project free cash flow (PFCF) for each of the next five years where the firms tax rate is 35%.

B. If the cost of capital for the project is 12%, what is the projected NPV for the investment?

C.What is the minimum Year 1 dollar savings (i.e, EBITDA) required to produce a breakeven NPV = 0?

Please solve using an Excel spreadsheet and please show your working on the Excel Spreadsheet. I will truly appreciate it. Thank you.