Please help with the spreadsheet with this question.

Project B:

This project requires an initial investment of $2,000,000 in equipment which will cost an additional

$100,000 to install. The firm will use the attached MACRS depreciation schedule to expense this

equipment. Once the equipment is installed, the company will need to increase net working capital by

$70,000. The project will last 6 years at which time the market value for the equipment will be $50,000.

The project will project a product with a sales price of $40.00 per unit and the variable cost per unit will be

$15.00. The fixed costs would be $150,000 per year. Because this project is not close to current products

sold by the business, management wants adjust the risk profile of this analysis by imposing a 2 percentage

point increase over the firm's WACC.

Years 2014 2015 2016 2017 2018 2019

Forecasted Units Sold 50,000 60,000 70,000 80,000 90,000 80,000

Project J:

This project requires an initial investment of $2,000,000 in equipment which will cost an additional

$50,000 to install. The firm will use the attached MACRS depreciation schedule to expense this

equipment. Once the equipment is installed, the company will need to increase net working capital by

$150,000. The project will last 6 years at which time the market value for the equipment will be $120,000.

The project will project a product with a sales price of $20.00 per unit and the variable cost per unit will be

$8.00. The fixed costs would be $220,000 per year. Because this project is very close to current products

sold by the business, management has expressed some favoritism towards this project and as allowed for a

reduced rate of return of 2 percentage point below its current WACC as the valuation hurdle it must meet or

surpass.

Years 2014 2015 2016 2017 2018 2019

Forecasted Units Sold 72,000 95,000 70,000 63,000 61,000 52,000