B24 1 X✓fx =NPV(B6, B17:B19) - B5 A B C D E F G H N 3 Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.18 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1.645 million in annual sales, with costs of $610,000. The tax rate is 21 percent. If the required return is 12 percent, what is the project's NPV? 4 Input area: 5 6 Asset investment $2,180,000 7 Estimated annual sales $1,645,000 8 Costs $610,000 9 Tax rate 21% 10 Project and asset life 3 12% 11 Required return 12 13 (Use cells A6 to B10 from the given information to complete this question.) 14 15 Output area: 16 17 Sales $1,645,000 18 Costs $610,000 19 Depreciation 726,667 20 EBT $308,333 21 Taxes 64,750 22 Net income $243,583 23 OCF $970,250 24 NPV 25 $1

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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NEED the correct EXCEL INPUT, not just the number answer, please provide the excel code to get the answer from the image

B24
1
X✓fx
=NPV(B6, B17:B19) - B5
A
B
C
D
E
F
G
H
N
3
Esfandairi Enterprises is considering a new three-year expansion project that
requires an initial fixed asset investment of $2.18 million. The fixed asset will
be depreciated straight-line to zero over its three-year tax life, after which
time it will be worthless. The project is estimated to generate $1.645 million
in annual sales, with costs of $610,000. The tax rate is 21 percent. If the
required return is 12 percent, what is the project's NPV?
4 Input area:
5
6 Asset investment
$2,180,000
7 Estimated annual sales
$1,645,000
8 Costs
$610,000
9 Tax rate
21%
10 Project and asset life
3
12%
11 Required return
12
13 (Use cells A6 to B10 from the given information to complete this question.)
14
15 Output area:
16
17 Sales
$1,645,000
18 Costs
$610,000
19 Depreciation
726,667
20 EBT
$308,333
21 Taxes
64,750
22 Net income
$243,583
23 OCF
$970,250
24 NPV
25
$1
Transcribed Image Text:B24 1 X✓fx =NPV(B6, B17:B19) - B5 A B C D E F G H N 3 Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.18 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1.645 million in annual sales, with costs of $610,000. The tax rate is 21 percent. If the required return is 12 percent, what is the project's NPV? 4 Input area: 5 6 Asset investment $2,180,000 7 Estimated annual sales $1,645,000 8 Costs $610,000 9 Tax rate 21% 10 Project and asset life 3 12% 11 Required return 12 13 (Use cells A6 to B10 from the given information to complete this question.) 14 15 Output area: 16 17 Sales $1,645,000 18 Costs $610,000 19 Depreciation 726,667 20 EBT $308,333 21 Taxes 64,750 22 Net income $243,583 23 OCF $970,250 24 NPV 25 $1
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