Question: Please solve for NPV and ONLY use excel formulas Esfandairi Enterprises is considering a new three-year expansion project that requires an initial xed asset investment

Please solve for NPV and ONLY use excel formulas

Please solve for NPV and ONLY use excel formulasPlease solve for NPV and ONLY use excel formulasPlease solve for NPV and ONLY use excel formulas
Esfandairi Enterprises is considering a new three-year expansion project that requires an initial xed asset investment of $2.18 million. The xed asset will be depreciated straightline to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1.545 million in annual sales, with costs of $610,000. The tax rate is 21 percent. If the required return is 12 percent, what is the project's NPV? input area: Asset investment $2,180,000 Estimated annual sales $1,645,000 Costs $610,000 Tax rate 21% Project and asset life 3 Required return 12% Output area: Sales $1,645,000 Costs $610,000 Depreciation 726,667 EBT $308,333 Taxes 64,750 Net income $243,583 OCF $970,250 NPVYEAR 0 1 2 3 annual sales $1,645,000.00 $1,645,000.00 $1,645,000.00 less: costs $610,000.00 $610,000.00 $610,000.00 less: depreciation $726,666.67 $726,666.67 $726,666.67 EBT $308,333.33 $308,333.33 $308,333.33 less: tax @21% $64,750.00 $64,750.00 $64,750.00 EAT $243,583.33 $243,583.33 $243,583.33 add: depreciation $726,666.67 $726,666.67 $726,666.67 OCF $970,250.00 $970,250.00 $970,250.00 initial investment: plant -$2,180,000 Cash flows -$2,180,000.00 $970,250.00 $970,250.00 $970,250.00 pv @ 12% 1 0.89286 0.79719 0.71178 PRESENT VALUE -$2,180,000.00 $866,294.64 $773,477.36 $690,604.79 NPV $150,376.79 Answers : OCF $970,250.00 NPV $150,376.79

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!