1 Chapter 13: Applying Excel 3 Data 4 Example E 5 Cost of equipment needed $60,000 Working capital needed 7 Overhaul of equipment in four years $100,000 $5,000 8 Salvage value of the equipment in five years $10,000 9 Annual revenues and costs $200,000 10 Sales revenues 11 Cost of goods sold $125,000 12 out-of-pocket operating costs $35,000 13 Discount rate 14% 14 15 Enter a formula into each of the cells marked with a below 16 Exhibit 13.7 17 19 Purchase of equipment 20 Investment in working capital Sales 21 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 32 Use the formulas from Appendix 13B 33 Present value of $1 1/(1+r An 34 Present value of an annuity of $1 (1/r) (1- 1/ 1+rnn where n is the number of years and r is the discount rate 35 36 ?I Years 1 Chapter 13: Applying Excel 3 Data 4 Example E 5 Cost of equipment needed $60,000 Working capital needed 7 Overhaul of equipment in four years $100,000 $5,000 8 Salvage value of the equipment in five years $10,000 9 Annual revenues and costs $200,000 10 Sales revenues 11 Cost of goods sold $125,000 12 out-of-pocket operating costs $35,000 13 Discount rate 14% 14 15 Enter a formula into each of the cells marked with a below 16 Exhibit 13.7 17 19 Purchase of equipment 20 Investment in working capital Sales 21 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 32 Use the formulas from Appendix 13B 33 Present value of $1 1/(1+r An 34 Present value of an annuity of $1 (1/r) (1- 1/ 1+rnn where n is the number of years and r is the discount rate 35 36 ?I Years