Spreadsheet Application $[$LO $12-4,12-6]$

Bob Jensen Incorporated purchased a $$620,000$ machine to manufacture specialty taps for electrical equipment. Jensen expects to

sell all it can manufacture in the next $10$ years. To encourage capital investments, the government has exempted taxes on profits from

new Investments. This legislation is to be in effect for the foreseeable future. The machine is expected to have a $10-$year useful life with

no salvage value. Jensen uses straight$-$line depreciation. Jensen uses a $10\%$ discount rate in evaluating capital investments, the

investment is subject to taxes, and the projected pretax operating cash inflows are as follows:

Jensen has been paying $25\%$ for combined federal, state, and local income taxes, a rate that is not expected to change during the

period of this investment. The firm uses straight$-$line depreciation. Assume, for simplicity, that MACRS depreciation rules do not apply.

Requlred:

Using Excel, compute the following for the proposed investment:

The payback period, under the assumption that the cash inflows occur evenly throughout the year. $($Do not round Intermedlate

calculations. Round your final answer to $1$ decimal place.$)$

The accounting $($book$)$ rate of return based on $($a$)$ Initial investment, and $($b$)$ average investment. $($Round your final answers to $1$

decimal place $($l$.$e$.0\mathrm{.}123=12\mathrm{.}3\%).)$

The net present value $($NPV$).($Do not round Intermedlate calculatlons. Round your final answer to nearest whole dollar amount.$)$

The present value payback period of the proposed investment under the assumption that the cash inflows occur evenly throughout

the year. $($Note: use the formula at the bottom of A ppendix $C,$ Table $1$ to calculate present value factors.$)($Do not round Intermedlate

calculations. Round your final answer to $2$ decimal places.$)$

The internal rate of return $($IRR$).($Do not round Intermedlate calculations. Round your final answer to $1$ decimal place $($l$.$e$.0\mathrm{.}123=$

$12\mathrm{.}3\%).)$

The modified internal rate of return $($MIRR$).($Do not round Intermedlate calculations. Round your final answer to $1$ decimal place

$($I$.$e$.0\mathrm{.}123=12\mathrm{.}3\%.)($In conjunction with this question, you might want to consult either of the following two references: MIRR

Function and$/$or IRR in Excel.$)$