A

B

C

1

2

3

4

5

6

7

8

9

10

11

12

13

Chapter 12: Applying Excel
Data
Example E
Cost of equipment needed	$220,000
Working capital needed	$30,000
Overhaul of equipment in four years	$30,000
Salvage value of the equipment in five years	$30,000
Annual revenues and costs:
Sales revenues	$395,000
Cost of goods sold	$250,000
Out-of-pocket operating costs	$75,000
Discount rate	18	%

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.)

d. Reset the discount rate to 18%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value?