I Need Answer in Excel

You are considering a start of a new product line. Project cost $800,000

Project life 4 year

Depreciation straight-line to zero

Feasibility study $10,000

Sales units $450 units per Year

Price per unit $18,000

Variable cost per unit $15,400

Fixed costs $610,000 per year

The required return on the project is 10 percent, and the relevant tax rate is 35 percent.

3. Explain whether each of the following need to be treated as an incremental cashflow or not:

* Land you already own that will be used for the project, but otherwise will be sold for $700,000, its market value.

* A $300,000 drop in sales of steel shafts clubs if the titanium woods with graphite shafts are introduced.

* $200,000 spent on research and development last year on graphite shafts.

* Dividend payments by the firm.

* The resale value of plant and equipment at the end of the project's life.