ABC 1 2 3 4 5 6 7 8 9 10 11 12 13 Chapter 13: Applying Excel Data Example E Cost of equipment needed $230,000 Working capital needed $30,000 Overhaul of equipment in four years $20,000 Salvage value of the equipment in five years $25,000 Annual revenues and costs: Sales revenues $420,000 Cost of goods sold $270,000 Out-of-pocket operating costs $80,000 Discount rate 15 % What is the net present value of the project? The internal rate of return is between what two whole discount rates (e.g., between 10% and 11%, between 11% and 12%, between 12% and 13%, between 13% and 14%, etc.)? Reset the discount rate to 15%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value?