Use excel and show formulas

Advantech, Inc is considering to start selling a new product. The company spent $200,000 to develop the product over the last five years. The estimated life of the product is 3 years and the estimated operating revenues and costs are the following: 1 2 3 Sales $600,000 $700,00 $500,000 Operating costs $300,000 $350,000 $250,000 To produce this product the company will have to acquire a new equipment that costs $400,000. The equipment has a life of 3 years and will be depreciated straight line to zero (meaning that the book value in 3 year is 0). The company believes that the equipment

can be sold in 3 year for $80,000. The new product requires networking capital at a level of about 10% of sales. The NWC should be built on the prior year. For example, at time 0 the company needs to have $60,000 in NWC for this project. The tax rate is 21% and the appropriate discount rate is 10%. a. Estimate the cash-flows associated with the project. b. Compute the NPV for the project. c. Should Advantech start with the production of the new product? Explain why.