Show only in excel. NO hard coded formulas.

A. Assuming that the investment can be depreciated using 7-year straight line depreciation with no salvage value, calculate the project NPV.

B. What will be the company's gain in present value if it uses a 7-year modified accelerated deprecation (MACRS) schedule (shown in screenshot under Section B).

F G H I K 4 2,500 5 2,500 6 2,500 7 2,500 C D C 1 DEPRECIATION SCHEDULE 2 Section a straight line depreciation 3 Year 0 1 2 3 4 Earnings before depreciation and taxes 3,000 3,000 3,000 5 Depreciation 6 Earnings before taxes 7 Tax (34%) 8 Net operating profit after tax 9 Capital investment (no salvage value) -10,500 10 Add back depreciation 11 Free cash flow 12 13 Discount rate 11% 14 NPV 15 16 Section b. MACRS depreciation 17 Year 1 2 3 18 MACRS depreciation 14.29% 24.49% 17.49% 19 Earnings before depreciation and taxes 3,000 3,000 3,000 20 Depreciation 21 Earnings before taxes 22 Tax (34%) 23 Net operating profit after tax 24 Capital investment (no salvage value) -10,500 25 Add back depreciation 26 Free cash flow 27 28 Discount rate 11% 29 NPV 30 31 4 12.49% 2,500 5 8.93% 2,500 4.45% 8.93% 2,500 8.93% 2,500 32 34 36