MUST USE & SHOW CELL REFERENCES for each box

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B E 5 Points Possible: 10 Use the problem information and Given Data to complete the schedules and 6 question below. To receive full credit, you must use cell references (linking) when possible, and 7 use Excel formulas for all calculated amounts. When computing the net present value of the new 8 machine, you must use the Excel PV function to compute PV of Cash Flows amounts to receive 9 full credit 10 11 Problem Information: Belgi's Chocolates, Inc. is considering buying a new machine that will 12 automatically dip chocolates. (The dipping operation is currently done primarily by hand.) The annual costs 13 of the current method, relevant costs if the new machine is purchased, and other important information are 14 provided on the Given Data worksheet. BELGI'S CHOCOLATES, INC. Net Annual Cash Inflows Provided by the New Dipping Machine 18 19 Reduction in annual operating costs: 20 Annual operating costs using current hand method 19,000 21 Less: Annual operating costs of new machine 10,000 22 = Annual savings in operating costs 9,000 Plus: Increased annual contribution margin due to 23 increased production with the new machine 11,000 24 Total net annual cash inflows 20,000 amant Lab 5 Given Data 16 17 FI 19 Reduction in annual operating costs: 20 Annual operating costs using current hand method 19,000 21 Less: Annual operating costs of new machine 10,000 22 = Annual savings in operating costs 9,000 Plus: Increased annual contribution margin due to 23 increased production with the new machine 11,000 24 Total net annual cash inflows 20,000 25 Correct! 26 27 Net Present Value of the New Machine PV of Cash Flows Amount of 30 Item Year(s) Cash Flows 31 Cost of the new machine 0 S (90,000) 32 Parts replacement costs end of 6th year 6 (25,000) 33 Net annual cash inflows 1-10 34 Salvage value of new machine 10 8,000 35 Net present value 36 Using the general decision rule for the net yes present value method, should the management the manaa Lab 5 Given Data E Given Data: 2 BELGI'S CHOCOLATES, INC. Cost of new machine 5 Life expectancy of new machine, in years 6 Parts replacement costs at the end of year 6 7 Salvage value of new machine at the end of year 10 4 LA 90,000 10 25,000 8,000 8 10,000 19,000 5,500 2.00 14% TT 9 Annual operating costs of new machine $ 10 Annual operating costs of current method $ 11 Increased production (boxes) per year 12 Contribution margin per box $ 13 Required return on investment 15 16 17 The syntax of the PV function is: PV(rate, nper, pmt, [fv], [type]) 18 Rate = Interest rate, in this problem, .14 [14%] 20 Nper = Number of periods, in years 22 Pmt = This argument is used only for the total net 23 annual cash inflows, which is computed in Part 1 Given Data Lab 5 EI F 2.00 14% B 12 Contribution margin per box 13 Required return on investment 15 16 17 The syntax of the PV function is: PV(rate, nper, pmt, [fv], [type]) 18 Rate = Interest rate, in this problem, 14 [14%) 20 Nper = Number of periods, in years 22 Pmt = This argument is used only for the total net annual cash inflows, which is computed in Part 1 24 Leave this argument blank for all other PV computations. 26 Fv=Future value. In this problem, the future value is the cost of the replacement of parts at the end of year 6 and the salvage value of the machine at the end of year 10. 30 Type = Leave this field blank. Doing so indicates payments are made at the end of the period. 23 27 28 31 32 33 34 20 Lab 5 Given Data