Required information The Chapter 14 Form worksheet is to be used to create your own worksheet version of Example E and Exhibit 14-8 in the text. 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 C 1. Chapter 14: Applying Excel 2 3 Data 4 Example E Cost of equipment needed 6 Working capital needed 7. 320,000 55,000 Overhaul of equipment in four years 24 25,000 8 Salvage value of the equipment in five years Annual revenues and costs: 35,000 9. %24 380,000 235,000 10 Sales revenues 11 Cost of goods sold 12 Out-of-pocket operating costs 65,000 13 Discount rate 10 %
Required information The Chapter 14 Form worksheet is to be used to create your own worksheet version of Example E and Exhibit 14-8 in the text. 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 C 1. Chapter 14: Applying Excel 2 3 Data 4 Example E Cost of equipment needed 6 Working capital needed 7. 320,000 55,000 Overhaul of equipment in four years 24 25,000 8 Salvage value of the equipment in five years Annual revenues and costs: 35,000 9. %24 380,000 235,000 10 Sales revenues 11 Cost of goods sold 12 Out-of-pocket operating costs 65,000 13 Discount rate 10 %
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
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Transcribed Image Text:Required information
The Chapter 14 Form worksheet is to be used to create your own worksheet version of Example E and Exhibit 14-8 in the
text.
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
B
1 Chapter 14: Applying Excel
2
3
Data
4
Example E
Cost of equipment needed
6 Working capital needed
320,000
55,000
Overhaul of equipment in four years
25,000
8 Salvage value of the equipment in five years
35,000
Annual revenues and costs:
10
380,000
235,000
65,000
10 %
Sales revenues
11
Cost of goods sold
12
Out-of-pocket operating costs
13 Discount rate
Transcribed Image Text: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.)
Net present value
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.)?
The internal rate of return is between
and
d. Reset the discount rate to 10%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a
positive net present value?
Minimum salvage value required to generate a positive prosent valuo
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