c. Speculate about the long term effect the bonus plan is likely to d. Recommend how to compensate managers in a way that discourages camesmanship Xcel ATC 10-6 Spreadsheet Assignment Using Excel Kilby Company is considering the purchase of new automated manufacturing equipment that would CO SI50,000. The equipment would save $42.500 in labor costs per year over its six year life. At the end of the fourth year, the equipment would require an overhaul that would cost $25,000. The equip ment would have a $7.500 salvage value at the end of its life. Kilby's cost of capital is 12 percent Required a. Prepare a spreadsheet similar to the one that follows to calculate nel present value, the present value index, and the internal rate of return Or 1 DON F Name: + Chapter 10 - Working with Excel 2 12% 3 Net Present Value at: 4 5 6 7 a Cash flow $(150,000) 42,500 42,500 42,500 17,500 42,500 50,000 $ 12,647 Year 0 Initial investment 1 Net cash flow 2 Net cash flow 3 Net cash flow 4 Net cash flow 5 Net cash flow 6 Net cash flow Net present value (NPV) 9 10 11 12 13 14 1.084 15 Present value index 16 14.95% 17 Internal rate of return