PLEASE SHOW THE FORMULA IF CALCULATION IS DONE IN EXCEL

4. (18 points) MMS is considering a 4-year project to improve its production efficiency. Buying a new machine for $800,000 is estimated to result in $300,000 in annual pre-tax cost savings. The machine falls in the MACRS 5-year class (i.e., 0.200 at t=1, 0.320 at t=2, 0.192 at t=3, 0.115 at t=4, 0.115 at t=5, and 0.058 at t=6), and it will have a pre-tax salvage value at the end of the project of $150,000. The machine also requires an initial investment in spare parts inventory of $20,000, along with an additional $5,000 increase in inventory for each succeeding year of the project. MMSs corporate tax rate is 35% and its discount rate is 15%. Assume that all increases in net working capital will be fully recovered at the final year of the project. To analyze the project, you as a manager of MMS prepare the following income statement and cash flow table using an Excel spreadsheet.

	Year	0	1	2	3	4
I/S	Rev.
	Costs (Savings)		-300,000	-300,000	-300,000	-300,000
	Depr		160,000	256,000	a)	92,000
	EBT		140,000	44,000	b)	208,000
	Tax		49,000	15,400	c)	72,800
	NI		91,000	28,600	95,160	135,200
CF	OCF		251,000	284,600	d)	227,200
from	NCS	800,000				e)
Assets	dNWC	20,000	5,000	5,000	5,000	f)
	CF	-820,000	246,000	279,600	243,760	g)
NPV	PV(CF)	-820,000	213,913.04	211,417.77	160,276.16	h)
	NPV	i)