1 Chapter 14: Applying Excel 2 Data 3 Example E 4 Cost of equipment needed 5 Working capital needed 6 Overhaul of equipment in four years 7 Salvage value of the equipment in five $35,000 8 years 9 Annual revenues and costs: 10Sales revenues 11 Cost of goods sold 12 Out-of-pocket operating costs 13 Discount rate $400,000 $40,000 $20,000 $430,000 $245,000 $70,000 % 15 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.) 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.) 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.)? d. Reset the discount rate to 15%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value?