Tor grading Required information The Chapter 14 Form worksheet is to be used to create your own worksheet version of Example E and Exhibit 14-8 in the text. Download the Applying Excel form and enter formulas in all cells that contain question marks. For example, in cell C21 enter the formula 8109 Note: The present value factors could be computed using the built-in Excel function PV, but we recommend using the formulas in Appendix 148. Verify that your worksheet matches the example in the text. Check your worksheet by changing the discount rate to 10%. The net present value should now be between $56,400 and $56,535 depending on the precision of the calculations. If you do not get an answer in this range, find the errors in your worksheet and correct them. If you did not use formulas to calculate the Discount Factors, be sure that those values are updated appropriately using the Appendix 148 formulas that are also noted at the bottom of the spreadsheet instead of using the Discount Factor tables, Click here to view Exhibt.148.1 and Exhibit:148-2. to determine the appropriate discount factors) using tables Save your completed Applying Excel form to your computer and then upload it here by clicking "Browse." Next, click "Save. You will use this worksheet to answer the questions in Part 2 Free Use after Login Sign in to continue using for free and enjoy more services. B Chapter 14: Applying Excel D E F G H Years 3 2 4 5 Data Example E Cost of equipment needed $60,000 Working capital needed $100,000 Overhaul of equipment in four years $5,000 Salvage value of the equipment in five years $10,000 Annual revenues and costs: Sales revenues $200,000 1 Cost of goods sold $125,000 2 Out-of-pocket operating costs $35,000 3 Discount rate 14% 4 5 Enter a formula into each of the cells marked with a ? below 6 Exhibit 14-8 7 8 Now 9 Purchase of equipment $ (60,000) 20 Investment in working capital $ (100,000) 21 Sales $ 22 Cost of goods sold $ 23 Out-of-pocket operating costs $ 24 Overhaul of equipment 25 Salvage value of the equipment 26 Working capital released 27 Total cash flows (a) $ (160,000) $ 28 Discount factor (14%) (b) 1.0000 29 Present value of cash flows (a) (b) $ (160,000) $ 30 Net present value $ 31.502 31 32 "Use the formulas from Appendix 13B: 33 Present value of $1 = 1/(1+r)^n 34 Present value of an annuity of $1 = (1/(1-1/(1+r)^n)) 35 where n is the number of years and is the discount rate 36 37 38 39 40 41 200,000 $ (125,000) $ (35,000) $ 200,000 $ (125,000) $ (35,000) $ 200,000 $ (125,000) $ (35,000) $ $ 200,000 (125,000) (35,000) 200,000 $ (125,000) $ (35,000) $ (5,000) $ $ 35,000 $ 0.5921000 20,724 $ 40,000 $ 0.8772000 35,088 $ 40.000 $ 0.7695000 30,780 $ 40.000 S 0.6750000 27,000 $ 10,000 100.000 150,000 0.5194000 77,910 Required information The Chapter 14 Form worksheet is to be used to create your own worksheet version of Example E and Exhibit 14-8 in the text 2. The company is considering a project involving the purchase of new equipment. Change the data area of your worksheet to match the following: Use Exhibit 14B-1 and Exhibit 14B-2. (Use appropriate factor(s) from the tables provided.) B + es 1 Chapter 14: Applying Excel 2 3 Data 4 Example E 5 Cost of equipment needed 6 Working capital needed 7 Overhaul of equipment in four years 8 Salvage value of the equipment in five years 9 Annual revenues and costs: 10 Sales revenues 11 Cost of goods sold 12 Out-of-pocket operating costs 13 Discount rate $ $ $ $ 310,000 50,000 30,000 30,000 $ $ $ 390,000 245.000 60,000 10% Required information a. What is the net present value of the project? (Negative amount should be indicated by a minus sign. Round your present value factor to 3 decimals and round all other intermediate calculations to nearest whole dollar) Net present value c. The internal rate of return is between what two whole discount rates (e.g., between 10% and 11%, between 11% and 12%, between 12% and 13%, between 13% and 14%, etc.)? The internal rate of retum is between 110 % and % d. Reset the discount rate to 10%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value? Minimum salvage value required to generate a positive present value