Question: Please help with the below spreadsheet inputs/outputs: Purpose of spreadsheet: Calculate the payback period, profitability index, net present value, and internal rate of return for

Please help with the below spreadsheet inputs/outputs:

Purpose of spreadsheet: Calculate the payback period, profitability index, net present value, and internal rate of return for the new strip mine. Should Lynch Mining take the contract and open the mine?

Specifics:

Lynch Mining
Input area:
Land cost $ 4,000,000
Aftertax land value $ 6,500,000
Equipment $ 95,000,000
Equipment salvage 60%
Contract sales/tons 500,000
Contract $/ton $86
Year 1 production 620,000
Year 2 production 680,000
Year 3 production 730,000
Year 4 production 590,000
Spot market $/ton $77
Variable cost/ton $31
Fixed costs $4,100,000
NWC percent 5%
Reclamation costs $2,700,000
Charitable expense $6,000,000
Tax rate 38%
Required return 12%
Year 1 depreciation 14.29%
Year 2 depreciation 24.49%
Year 3 depreciation 17.49%
Year 4 depreciation 12.49%

Area for input:

Output area:
Time 0 cash flow
Equipment
Land
NWC
Total
Sales Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Contract
Spot
Total
Sales
VC
FC
Dep
EBT
Tax - - - - -
NI $ - $ - $ - $ - $ - $ -
+ Dep - -
OCF $ - $ - $ - $ - $ - $ -
Beginning NWC $ -
Ending NWC
NWC cash flow $ - $ -
Total cash flow $ - $ - $ - $ - $ -
Book value
Salvage MV $ -
BV
Taxes -
Salvage CF $ -
Time Cash flow
0
1
2 -
3 -
4 -
5 -
6 -
Profitability index #DIV/0!
IRR #NUM!
IRR #NUM!
NPV $ -

THANK YOU!

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