(a) Develop proforma Income Statement Using Excel Spreadsheet (b) Compute Not Project Cashows. NPV, and IRR (c) Develop problem-solving and critical thinking skills and make long term investment decisions Lite Period of the year SOO T Act Pere ip savage wale before Corte 1.000 131 Cost of a ESTIMATINO O Cash FT Year as Investments 1) Equipment cost 2) Shipping and Install cost 3) Startup expenses Total Basis Cost (1+2+3) 4) Net Working Capital Total Initial Outlay Operations Revenue Operating Cost Depreciation EBIT Taxes Net income Add back Depreciation Total Operating Cash Flow XO000XX0000 0000 20 000 Terminal 1) Change in net WC 2) Salvage value (after tax) Total Salvage Value Before Tax (1-T) Project Net Cash Flows $ $ $ $ $ NPV IRR Payback 081 Would you accept the project based on NPV, RR? Would you accept the project based on Payback rulet project cut-o is 3 years? 082 Impact of 2017 Tax Cut Act on Net Income, Cash Flows and Capital Budgeting Investment ) Decisions Estimate NPV, IRR and Payback period of the projectement is deprecated in first year and tax rate equals to 21%. Would you accept or reject the project? (b) As a CFO of the firm, which of the above two scenario (a) (b) would you choose? Why? 3 How would you explain to your CEO what NPV means? 14 What are advantages and disadvantages of using only Payback method? oss What are advantages and disadvantages of using NPV versus IRR? #6 Explain the difference between independent projects and mutually exclusive projects When you are confronted with Mutually Exclusive Projects and have conflicts with NPVA IRR which w INPVR (a) Develop proforma Income Statement Using Excel Spreadsheet (b) Compute Not Project Cashows. NPV, and IRR (c) Develop problem-solving and critical thinking skills and make long term investment decisions Lite Period of the year SOO T Act Pere ip savage wale before Corte 1.000 131 Cost of a ESTIMATINO O Cash FT Year as Investments 1) Equipment cost 2) Shipping and Install cost 3) Startup expenses Total Basis Cost (1+2+3) 4) Net Working Capital Total Initial Outlay Operations Revenue Operating Cost Depreciation EBIT Taxes Net income Add back Depreciation Total Operating Cash Flow XO000XX0000 0000 20 000 Terminal 1) Change in net WC 2) Salvage value (after tax) Total Salvage Value Before Tax (1-T) Project Net Cash Flows $ $ $ $ $ NPV IRR Payback 081 Would you accept the project based on NPV, RR? Would you accept the project based on Payback rulet project cut-o is 3 years? 082 Impact of 2017 Tax Cut Act on Net Income, Cash Flows and Capital Budgeting Investment ) Decisions Estimate NPV, IRR and Payback period of the projectement is deprecated in first year and tax rate equals to 21%. Would you accept or reject the project? (b) As a CFO of the firm, which of the above two scenario (a) (b) would you choose? Why? 3 How would you explain to your CEO what NPV means? 14 What are advantages and disadvantages of using only Payback method? oss What are advantages and disadvantages of using NPV versus IRR? #6 Explain the difference between independent projects and mutually exclusive projects When you are confronted with Mutually Exclusive Projects and have conflicts with NPVA IRR which w INPVR