Chapter 12: Applying Excel Data Example E Cost of equipment needed $360,000 Working capital needed $30,000 Overhaul of equipment in four years $30,000 Salvage value of the equipment in five years $20,000 Annual revenues and costs: Sales revenues $410,000 Cost of goods sold $230,000 Out-of-pocket operating costs $85,000 Discount rate 11%

a. What is the net present value of the project?

c. The internal rate of return is between what two whole discount rates (e.g., between 10% and 11%, between 11% and 12%

d. Reset the discount rate to 11%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value?