In $2003,$ Sunoco Inc., agreed to build a coke$-$making plant with an annual capacity of $550,000$ tons per year in order to supply plants of International Steel Group, Inc. Petroleum coke is a valuable and essential commercial product that is used directly in a wide range of applications including aluminum manufacturing, fuels, and numerous other products including ateel, glass, paint, and fertilizers. The facility was estimated to cost $$140$ million, and ISG agreed to purchase the coke $($used to make steel$)$ for the next $15$ years.

Assume that you were the engineer analyzing whether or not to do this project. You are to

provide a written justification for this project, making the following assumptions:

a$)$ The price of coke is $$325$ per ton in time $0,$ and increases at $2\%$ per year over the life of the $15$ year contract.

b$)$ Raw material cost, which is essentially crude oil, in time $0$ are $$31\mathrm{.}00$per barrel, increasing $1\mathrm{.}5\%$ per year. Note that it takes $4$ barrels of crude oil to make a ton of coke.

c$)$ Labor expenses in time $0$ of $$50$ million per year, increasing at a rate of $4\mathrm{.}5\%$ per year.

d$)$ Energy expenses in time $0$ of $$20$ million per year, increasing at a rate of $3\mathrm{.}0\%$ per year.

e$)$ Overhead costs are $$7$ million per year, and assumed to hold constant over the project life.

f$)$ Assume $10$ year MACRS depreciation for the initial investment.

g$)$ At the start of year $8,$ a major overhaul in the amount of $$40MM$ will be necessary. This will be depreciable with $5$ year MACRS. Assume that this overhaul will NOT impact production or sales of coke, in the current year, it is only to keep the status quo.

h$)$ Assume an effective tax rate of $32\%,$ and the facility has no salvage value at the end of a $15$ year horizon.

i$)$ Finally, assume all cash flows occur at the end of each year.

PLEASE DO THESE THINGS: Full excel type spreadsheets for revenue, expense and investment calculations.