Question: PLEASE SOLVE USING AN EXCEL SPREADSHEET AND SHOW ALL WORK/FORMULAS USED 3. Cascade Solutions, Incorporated is considering an expansion project. Equipment needed for this project
PLEASE SOLVE USING AN EXCEL SPREADSHEET AND SHOW ALL WORK/FORMULAS USED
3. Cascade Solutions, Incorporated is considering an expansion project. Equipment needed for this project will cost $100.000.000. transportation costs will be $750,000, the project will last for 5 years and will be depreciated as a 5-year MACRs property. 10,000 units will be sold during the first year of operations. The company does not expect the number of units sold per year to increase over the life of the project. Net working capital will start at $50,000,000 and will then require additional net working capital each year equal to 20 percent of the projected sales increase for the following year. Total annual fixed costs each year will be $8,400,000, and variable production costs are expected to be $2.850 per unit. Units are priced at $7,500 a piece. The equipment can be sold at the end of the project's life for 20 percent of its acquisition cost. Cascade's cost of capital is 9 percent and its marginal tax rate is 21 percent. Should the project be accepted
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