Prepare the Net Present Value calculations using an Excel workbook, with each scenario on a separate worksheet. Use the following format to set up your excel spreadsheets – an upper section for cash flows, including the cash flow for taxes; and a lower section for the tax formula and calculation of taxes owed or saved.

Scenario

The Tax Planning Company is considering investing $400,000 cash in a three-year project with the following cash flows.

Net Present Value calculations using an Excel workbo" class="fr-fic fr-dii" style="width: 451px;">

Assumptions:
Under each of the following assumptions, determine the NPV should the Tax Planning Company make the investment. In each case, use an 8 percent discount rate.
a. The revenue is taxable, the expenses are deductible, and the marginal tax rate is 15 percent.
b. The revenue is taxable, the expenses are deductible, and the marginal tax rate is 40 percent.
c. The revenue is taxable, only one-half the expenses are deductible, and the marginal tax rate is 15 percent.
d. The Tax Planning Company can deduct the expenses in the year paid (against other sources of income) but can defer recognizing the $180,000 total income until year 3. (It will collect the revenues as indicated in years 1, 2, and 3 so that before-tax cash flows do not change.) The marginal tax rate is 40percent.

YEAR Now Total Investment return of investment (400,000) Revenues Expenses Net cash flows before taxes (400,000) 55000 40,000 425.000 120,000 400,000 80,000 65,000 35,000 180,000 00 (25.000 (10,000) (60,000) .