Question: Please show how to do using excel inputs Thank you! The Rustic Welt Company is proposing to replace its old welt-making machinery with more modern

Please show how to do using excel inputs

Please show how to do using excel inputs Thank you! The RusticWelt Company is proposing to replace its old welt-making machinery with more

Thank you!

The Rustic Welt Company is proposing to replace its old welt-making machinery with more modern equipment. The new equipment costs \$9.2 million (the existing equipment has zero salvage value). The attraction of the new machinery is that it is expected to cut manufacturing costs from their current level of $8.20 a welt to $4.20. However, as the following table shows, there is some uncertainty about both the future sales and the performance of the new machinery: Conduct a sensitivity analysis of the replacement decision assuming a discount rate of 12%. Rustic does not pay taxes. Calculate the NPV. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. Enter your answers in dollars not in millions. Negative amounts should be indicated by a minus sign. The most likely outcomes for a particular project are estimated as follows: However, you recognize that some of these estimates are subject to error. Suppose each variable turns out to be either 10% higher or 10% lower than the initial estimate. The project will last for 10 years and requires an initial investment of $1.6 million, which will be depreciated straight-line over the project life to a final value of zero. The firm's tax rate is 21%, and the required rate of return is 12%. a. What is project's NPV in the best-case scenario, that is, assuming all variables take on the best possible value? b. What is project's NPV in the worst-case scenario? Note: For all the requirements, a negative amount should be indicated by a minus sign. Enter your answers in dollars, not in millions. Do not round intermediate calculations. Round your answers to the nearest dollar amount

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