In Excel Spreadsheet Format Please (with formulas)

LO13-2, LO13-3 The Excel worksheet form that appears below is to be used to recreate Example E and Exhibit 13 8. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet form. B C D E F G 1 Chapter 13: Applying Excel 3 Data 4 Example E 5 Cost of equipment needed 6 Working capital needed 7 Overhaul of equipment in four years 8 Salvage value of the equipment in five years 9 Annual revenues and costs: 10 Sales revenues 11 Cost of goods sold 12 Out-of-pocket operating costs 13 Discount rate $60,000 $100,000 $5,000 $10.000 $200,000 $125,000 $35.000 14% 15 Enter a formula into each of the cells marked with a ? below 16 Exhibit 13-8 Years 18 Now 19 Purchase of equipment 20 Investment in working capital 21 Sales 22 Cost of goods sold 23 Out-of-pocket operating costs 24 Overhaul of equipment 25 Salvage value of the equipment 26 Working capital released 27 Total cash flows (a) 28 Discount factor (14%) (b) 29 Present value of cash flows (a) x (b) 30 Net present value ? ? ? ? ? ? 32 "Use the formulas from Appendix 13B 33 Present value of $1 = 1/(1+r)^n 34 Present value of an annuity of $1 = (1/0)*(1-1/(1+r)^n)) 35 where n is the number of years and r is the discount rate H N Chapter 13 Form Filled in Chapter 13 Form Chapter 13 Formul You should proceed to the requirements below only after completing your worksheet. Note that you may get a slightly different net present value from that shown in the text due to the precision of the calculations. Required: 1. Check your worksheet by changing the discount rate to 10%. The net present value should now be between $56,495 and $56,518depending on the precision of the calculations. If you do not get an answer in this range, find the errors in your worksheet and correct them. Explain why the net present value has increased as a result of reducing the discount rate from 14% to 10%. 2. The company is considering another project involving the purchase of new equipment. Change the data area of your worksheet to match the following: Data $120,000 $80,000 $40,000 $20,000 Example E Cost of equipment needed................ Working capital needed ....... Overhaul of equipment in four years ....... Salvage value of the equipment in five years Annual revenues and costs: Sales revenues .. Cost of goods sold ............ Out-of-pocket operating costs ....... Discount rate.. $255,000 $160,000 $50,000 14% a. What is the net present value of the project? b. Experiment with changing the discount rate in one percent inc 12%, 15%, etc.). At what interest rate does the net present value turn from negative to positive? c. 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.)? d. Reset the discount rate to 14%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value