Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Using Excel solve for the following expansion prorject with input section, working section, and output section. w w w ho w ee S w w
Using Excel solve for the following expansion prorject with input section, working section, and output section.
w w w ho w ee S w w otan relacions The project will the www machines. The first machine will the NACRS schedule. The second machine will t he MACRS schedule Production of the redactors oli initial increases in counts receivable of N o s Aditional networking capital (NWC) t of the tales change for the following year Unit years we given in the table below h o the The Year over the So Sales 100 11.000 10,400 8.00 8.000 9.000 4.000 1.800 will still be set However, the price is expected to increase I percent each of the m ost sale costs will initially be set at 544 per unit, and fixed costs will ya Viale costs will decrease 3 percent per year over the life of the project, but The first machine and S4,000 at the end of the project's life, and the second machine can be $1.000 at the end of the project life The cost of c al for Atlantie Mercury is 193% and it has a marginal tax rate of 20% 1. Calculate the set cash flows for Atlantic Mercury Corporation 2. Use the NPV and IRRO) functions in Excel to calculate the NPV and IRR(s)for this project. Should the project be accepted Use an Excel data table on your worksheet to perform a sensitivity analysis on the initial price per unit estimate. How sensitive is the project's NPV to changes in the initial price per unit Suppose the Year MACRS schedule should be used for the first machine instead of the Year MACRS schedule. Use a drop-down list and either vlookup or a nested -if) statement to determine what will happen to NPV and IRR by changing the MACRS schedule for the first machine. Would the accept reject decision change Atlantic Mercury Corporation wants to expand into a new line of quantum redactors. The project will last for eight years. Production will require the purchase of two new machines. The first machine will cost $310,000 and will be depreciated using the 7-year MACRS schedule. The second machine will cost $160,000 and will be depreciated using the 5-year MACRS schedule. Production of the redactors will require initial increases in inventory of $170,000, initial increases in accounts receivable of $110,000, and initial increases in accounts payable of $430,000. Additional net working capital (NWC) changes each year will equal 10 percent of the projected sales change for the following year. Unit production estimates for the next 8 years are given in the table below: Year 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 Units Sales 9,300 11,000 10,400 8,200 8,600 9,000 4,000 1,800 The price per unit will initially be set at $96. However, the price is expected to increase 1 percent each year over the life of the project. Variable costs will initially be set at $44 per unit, and fixed costs will be $250,000 per year. Variable costs will decrease 3 percent per year over the life of the project, but fixed costs will remain constant. The first machine can be sold for $4,000 at the end of the project's life, and the second machine can be sold for $1,000 at the end of the project's life
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started