Learning Objectives nderstand how to use Excel spreadshee (a) Develop proforma Project Income Statement Using Excel Spreadsheet (b) Compute Net Project Cash flows, NPV, IRR and PayBack Period (c) Develop Problem-Solving and Critical Thinking Skills 1) Life Period of the Equipment4 years 2) New equipment cost 3) Equipment ship & install cost 4) Related start up cost 5) Equip. Salvage Value 6) Sales for first year (1) 7) Sales increase per year 5% (200,000) 8) Operating cost s (120,000) (35,000) -60% (60 Percent of Sales) (5,000) 9) Depreciation (Straight Line)/YR 5,000 10) Corporate Marginal Tax Rate 11) Cost of Capital (WACC) s(60,00o) 21% 200,000 10% ESTIMATING Initial Outlay (Cash Flow, CFo, T 0) CFO CF1 CF2 CF3 CF4 Year Investments: 1) Equipment cost 2) Shipping and Install cost 3) Start up expenses (200,000) (35,000) Total Basis Cost (1+2+3 Total Initial Outlay 240,000 Operations: Revenue Operating Cost Depreciation 200,000 210,000S 120,000) S (126,000) 220,500 231,525 243,101 (132,300) S (138,915) S (145,861) 60,000 S 60,000 S 60,000 60,000 S 20,000 (4,200) 15,800 60,000 S EBIT Taxes Net Income Add back Depreciation 60,000 Total Operating Cash Flow 75,800 XXXXX Terminal: 1) Salvage value (after tax) Salvage Value Before Tax (1-T) $11,850 Total Project Net Cash Flows #NAME? IRR Payback=