Upload the completed excel spreadsheet for this assignment with the correct answers by the due date. Yellow River Manufacturing

Contract Analysis

Units Sold per Year $60,000$

Price per unit $$60$

Cost of Equipment $$1,400,000$

Life $5$

Fixed Cost $$350,000$

Var Cost$/$Unit $$47$

Total Var Cost $$2,820,000$

Actual Salvage $($Equipment$)$ $$150,000$

Change in NWC $$125,000$

WACC $10\%$

Tax Rate $25\%$

Depreciation

Year $1280000$

Year $2448000$

Year $3268800$

Year $4161280$

Year $5161280$

Terminal Cash Flow $257660$ Annual Cash Flows for Yellow River Manufacturing

Year $0$ Year $1$ Year $2$ Year $3$ Year $4$ Year $5$

Initial Outlay $$1,525,000$

Unit Sales

Sales

Variable Costs

Fixed Costs

Depreciation $280,000448,000268,800161,280161,280$

Taxable Cash Flows

Taxes

Add: Depreciation

Annual After$-$Tax Cash Flow

Terminal Cash Flow

Total Annual Cash Flows $(1,525,000)-----$ Net Present Value

IRR Terminal Cash Flow Calculation

Salvage $150,000$

Book $80,640$

Taxable $69,360$

Taxes $17,340$

After$-$Tax Salvage $($Equipment$)132,660$

NWC $$125,000$

Terminal Cash Flow $257,660$