1. Understand how to use EXCEL Spreadsheet
(a) Develop proforma Income Statement Using Excel Spreadsheet
(b) Compute Net Project Cashflows, NPV, and IRR
(c) Develop problem-solving and critical thinking skills
	and make long-term investment decisions
1) Life Period of the Equipment = 4 years
2) New equipment cost			($200,000)
3) Equipment ship & install cost			($35,000)
4) Related start up cost			($5,000)
5) Inventory increase			$25,000
6) Accounts Payable increase			$5,000
7) Equip. salvage value before tax			$15,000

8) Sales for first year (1)			$ 200,000
9) Sales increase per year			5%
10) Operating cost (60% of Sales)			$ (120,000)
(as a percent of sales in Year 1)			-60%
11) Depreciation			Use 3-yr MACRIS
12) Marginal Corporate Tax Rate (T)			35%
13) Cost of Capital (Discount Rate)			10%

Depreciation Basis of years: 3 years Year Macrs % Depreciation 33.33% 44.45% 14.81% 7.41% $0 $0 $0 Cornt Payback period ear Disco nt fact Disco nted CI Caatite CF Cont $0 $0 $0 $0 Payback period 29 Investments 30 1) Equipment cost 31 2) Shipping and Install cost 32 3) Start up expenses 33Total Basis Cost (1+2+3) $ 34 4) Net Working Capital 35 Total Initial Outlay 37 Operations: 38 Revenue 39 Operating Cost 40 Depreciation 41EBIT 42 axes 43 Net Income 45 Add back Depreciation 46 47 Total Operating Cash Flow 48 49 Terminal values: 50 1) Change in net WC 51 2) Salvage value (after tax) 52 Total 54 Project Net Cash Flows $ Payback-0.00 56 NPV- 57 58 Profitability Index- #DIV/0! Discounted Payback0.00