1 Chapter 13: Applying Excel 3 Data 4 Example E 5 Cost of equipment needed $60,000 $100,000 $5,000 $10,000 Working capital needed 7 Overhaul of equipment in four years 8 Salvage value of the equipment in five years 9 Annual revenues and costs: 10 Sales revenues 11 Cost of goods sold 12 Out-of-pocket operating costs 13 Discount rate 14 15 Enter a formula into each of the cels marked with a? below 16 Exhibit 13-8 17 18 19 Purchase of equipment 20 Investment in working capital 21 Sales 22 Cost of goods sold 23 Out-of-pocket operating costs 24 Overhaul of equipment 25 Salvage value of the equipment 26 Working capital released 27 Total cash flows (a) 28 Discount factor (14%) (b) 29 Present value of cash flows (a) x (b) 30 Net present value $200,000 125,000 $35,000 14% Years Now 32 "Use the formulas from Appendix 13B 33 Present value of $1-11+rn 34 Present value of an annuity of $1-(1/r) (11/(1+r*n) 35 where n is the number of years and r is the discount rate 36 37 38 40 41 42 43