This is a custom problem I think this is based on chapter 21, #31. the excel format is a mess in copy and paste

Smith Company is thinking about purchasing a new piece of equipment.

Conduct an NPV Analysis to determine if this is a viable option for Smith Company.

data:

New Equipment

(300,000)

Installation

(20,000)

Annual Increase in Contribution Margin

98,000

Annual Maintenance Costs

(10,000)

Salvage Value

20,000

Equipment Useful Life

5

Required Rate of Return

template:

	Cash Inflows		Cash Outflows		Net Cash Flow
Initial Investment			(300,000)
Year 1
Year 2
Year 3
Year 4
Year 5
Discount Rate	10%
Present Value of Future Cash Flows***			***(Use the =NPV Function in Excel. Select the discount rate first, followed by the net cash flow amounts starting with year 1 through year 5.)
Initial Investment
NPV
Hint: You can check your work by using the tables.

10%

- BL A CC 31 Cui: Chapter 21 - Excel Home insert Page Layout Formulas Data Review View H elp Powe E Genera - EE 23 Wrap Text Mergea Center Times New Roman 12AA BIU -a. A. Font - x for Clipboard Alignment B18 Abbott Company is thinking about purchasing a new piece of equipment 2 Concoct an NPV Analysis to determine if this is a viable option for Abbott Company 4 New Equipment 5 Installation 6 Annual Increase in Contribution Margin 7 Annual Maintenance Costs 8 Salvage Value 9 Equipment Useful Life 10 Required Rate of Return (300,000) (20,000) 98,000 (10,000) 20,000 10% Data Template Type here to search o w I power x Ace Cabiri Accounting AA = A Wap Test Mero Center S C BU Formatting Font Alignment Number Cash Inflows Cash Outflows Net Cash Fle 4 Year 2 5 Year 3 6 Year 4 7 Year 5 9 Discount Rate ***Use the NPV Function In Excel. Select the discount rate first, followed by the net cash flow amounts starting with year 1 through year 5.) 11 Present Value of Future Cash Flows*** 12 Initial Investment 13 NPV 14 Hint: You can check your work by using the tables. Data Template Type here to search O t w pow. * ACC 31. Final pe