Homework Help is Here – Start Your Trial Now!
Business
Finance
Cost of equipment needed Working capital needed Overhaul of equipment in four years Salvage value of the equipment in five years Annual revenues and costs: Sales revenues Cost of goods sold Out-of-pocket operating costs Discount rate Purchase of equipment Investment in working capital Sales Cost of goods sold Out-of-pocket operating costs Enter a formula into each of the cells marked with a ? below Exhibit 7-8 Overhaul of equipment Salvage value of the equipment Working capital released Total cash flows (a) $120,000 $80,000 $40,000 $20,000 Discount factor (14%) (b) Present value of cash flows (a) x (b) Net present value $255,000 $160,000 $50,000 11% Now ? ? ? ? ? ? 1 ? ? ? ? ? ? 2 ? ? ? ? ? ? Years 3 ? ? ? ? ? ? 4 ? ? ? ? ? ? ? 5

Cost of equipment needed Working capital needed Overhaul of equipment in four years Salvage value of the equipment in five years Annual revenues and costs: Sales revenues Cost of goods sold Out-of-pocket operating costs Discount rate Purchase of equipment Investment in working capital Sales Cost of goods sold Out-of-pocket operating costs Enter a formula into each of the cells marked with a ? below Exhibit 7-8 Overhaul of equipment Salvage value of the equipment Working capital released Total cash flows (a) $120,000 $80,000 $40,000 $20,000 Discount factor (14%) (b) Present value of cash flows (a) x (b) Net present value $255,000 $160,000 $50,000 11% Now ? ? ? ? ? ? 1 ? ? ? ? ? ? 2 ? ? ? ? ? ? Years 3 ? ? ? ? ? ? 4 ? ? ? ? ? ? ? 5

Essentials Of Investments
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
Section: Chapter Questions
Problem 1PS
See similar textbooks
icon
Related questions
Question
Filling in where “?” Are present
Requirement 1 Chapter 7: Applying Excel Data Example E Cost of equipment needed Working capital needed Overhaul of equipment in four years Salvage value of the equipment in five years Annual revenues and costs: Sales revenues Cost of goods sold Out-of-pocket operating costs Discount rate Requirement 2a Purchase of equipment Investment in working capital Sales Cost of goods sold Out-of-pocket operating costs Overhaul of equipment Salvage value of the equipment Working capital released Total cash flows (a) Discount factor (14%) (b) Present value of cash flows (a) x (b) Net present value $120,000 $80,000 $40,000 $20,000 Enter a formula into each of the cells marked with a ? below Exhibit 7-8 $255,000 $160,000 $50,000 11% Now *Use the formulas from Appendix 7B: Present value of $1 = 1/(1+r)^n Present value of an annuity of $1 = (1/r)*(1-(1/(1+r)^n)) where n is the number of years and r is the discount rate ? ? ? ? ? ? 1 Requirement 2 b ? ? ? ? ? ? 2 ? ? ? ? ? ? Years 3 ? ? ? ? ? ? Requirement 2 c 4 ? ? ? ? ? ? ? 5 ? ? ? ? ? ? ? ? F
Transcribed Image Text:Requirement 1 Chapter 7: Applying Excel Data Example E Cost of equipment needed Working capital needed Overhaul of equipment in four years Salvage value of the equipment in five years Annual revenues and costs: Sales revenues Cost of goods sold Out-of-pocket operating costs Discount rate Requirement 2a Purchase of equipment Investment in working capital Sales Cost of goods sold Out-of-pocket operating costs Overhaul of equipment Salvage value of the equipment Working capital released Total cash flows (a) Discount factor (14%) (b) Present value of cash flows (a) x (b) Net present value $120,000 $80,000 $40,000 $20,000 Enter a formula into each of the cells marked with a ? below Exhibit 7-8 $255,000 $160,000 $50,000 11% Now *Use the formulas from Appendix 7B: Present value of $1 = 1/(1+r)^n Present value of an annuity of $1 = (1/r)*(1-(1/(1+r)^n)) where n is the number of years and r is the discount rate ? ? ? ? ? ? 1 Requirement 2 b ? ? ? ? ? ? 2 ? ? ? ? ? ? Years 3 ? ? ? ? ? ? Requirement 2 c 4 ? ? ? ? ? ? ? 5 ? ? ? ? ? ? ? ? F
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS