The cafeteria you operate has a regular clientele for all three meals, seven days a week.

You want to expand your product line beyond what you are currently able to offer. To do

so requires the purchase of some additional specialty equipment costing $45,000, but you

project a resultant increase in sales (after deducting the cost of sales) of about $8,000 per

year for each of the next eight years with this new equipment. Assuming a required rate

of return (i.e., a hurdle rate) of 8%, should you pursue this opportunity? Why or why not?

Do the analysis under two conditions:

a. You are part of an income-tax-exempt enterprise.

b. The enterprise you are part of is subject to a 40% corporate income tax rate, and the

straight-line, depreciable life of the equipment you are contemplating purchasing is

five years.

Please teach me how to use excel to solve this problem. Thank you.