Chapter 13: Applying Excel: Excel Worksheet (Part 1 of 2) Download the Applying

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Chapter 13: Applying Excel: Excel Worksheet (Part 1 of 2)

Download the Applying Excel form and enter formulas in all cells that contain question marks.

For example, in cell C22 enter the formula "= B10".

Note: The present value factors could be computed using the built-in Excel function PV, but we recommend using the formulas in Appendix 13B.

Verify that your worksheet matches the example in the text.

Check your worksheet by changing the discount rate to 10%. The net present value should now be between $56,518 and $56,535—depending on the precision of the calculations. If you do not get an answer in this range, find the errors in your worksheet and correct them.

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables.

Save your completed Applying Excel form to your computer and then upload it here by clicking “Browse.” Next, click “Save.” You will use this worksheet to answer the questions in Part 2. rev: 11_08_2017_QC_CS-108759

CAN YOU PLEASE DO ON EXCEL SPREAD SHEET & PUT FORMULAS?

Chapter 13: Applying Excel Data Example E Cost of equipment needed $60,000 Working capital needed $100,000 Overhaul of equipment in four years $5,000 Salvage value of the equipment in five years $10,000 Annual revenues and costs: Sales revenues $200,000 Cost of goods sold $125,000 Out-of-pocket operating costs $35,000 Discount rate 14% Enter a formula into each of the cells marked with a ? below Exhibit 13-8 Years Now 1 2 3 4 5 Purchase of equipment ? Investment in working capital ? Sales ? ? ? ? ? Cost of goods sold ? ? ? ? ? Out-of-pocket operating costs ? ? ? ? ? Overhaul of equipment ? Salvage value of the equipment ? Working capital released ? Total cash flows (a) ? ? ? ? ? ? Discount factor (14%) (b) ? ? ? ? ? ? Present value of cash flows (a) x (b) ? ? ? ? ? ? Net present value ? *Use the formulas from Appendix 13B: Present value of $1 = 1/(1+r)^n Present value of an annuity of $1 = (1/r)*(1-(1/(1+r)^n)) where n is the number of years and r is the discount rate

Explanation / Answer

A B C D E F G Chapter 13: Applying Excel Data Example E Cost of equipment needed 60000 Working capital needed 100000 Overhaul of equipment in four years 5000 Salvage value of the equipment in five years 10000 Annual revenues and costs: Sales revenues 200000 Cost of goods sold 125000 Out-of-pocket operating costs 35000 Discount rate 0.14 Enter a formula into each of the cells marked with a ? below Exhibit 13-8 Years Now 1 2 3 4 5 Purchase of equipment =-B6 Investment in working capital =-B7 Sales =+B11 =+B11 =+B11 =+B11 =+B11 Cost of goods sold =-B12 =-B12 =-B12 =-B12 =-B12 Out-of-pocket operating costs =-B13 =-B13 =-B13 =-B13 =-B13 Overhaul of equipment =-B8 Salvage value of the equipment =+B9 Working capital released =+B7 Total cash flows (a) =SUM(B20:B27) =SUM(C20:C27) =SUM(D20:D27) =SUM(E20:E27) =SUM(F20:F27) =SUM(G20:G27) Discount factor (14%) (b) 1 =+B29/1.14 =+C29/1.14 =+D29/1.14 =+E29/1.14 =+F29/1.14 Present value of cash flows (a) x (b) =+B28*B29 =+C28*C29 =+D28*D29 =+E28*E29 =+F28*F29 =+G28*G29 Net present value =+B30+C30+D30+E30+F30+G30 *Use the formulas from Appendix 13B: Present value of $1 = 1/(1+r)^n Present value of an annuity of $1 = (1/r)*(1-(1/(1+r)^n)) where n is the number of years and r is the discount rate A B C D E F G Chapter 13: Applying Excel Data Example E Cost of equipment needed 60,000 Working capital needed 100,000 Overhaul of equipment in four years 5,000 Salvage value of the equipment in five years 10,000 Annual revenues and costs: Sales revenues 200,000 Cost of goods sold 125,000 Out-of-pocket operating costs 35,000 Discount rate 14% Enter a formula into each of the cells marked with a ? below Exhibit 13-8 Years Now 1 2 3 4 5 Purchase of equipment -60,000 Investment in working capital -100,000 Sales 200,000 200,000 200,000 200,000 200,000 Cost of goods sold -125,000 -125,000 -125,000 -125,000 -125,000 Out-of-pocket operating costs -35,000 -35,000 -35,000 -35,000 -35,000 Overhaul of equipment -5,000 Salvage value of the equipment 10,000 Working capital released 100,000 Total cash flows (a) -160,000 40,000 40,000 40,000 35,000 150,000 Discount factor (14%) (b) 1 0.87719298 0.76946753 0.67497152 0.59208028 0.51936866 Present value of cash flows (a) x (b) -160,000 35,088 30,779 26,999 20,723 77,905 Net present value 31,493 *Use the formulas from Appendix 13B: Present value of $1 = 1/(1+r)^n Present value of an annuity of $1 = (1/r)*(1-(1/(1+r)^n)) where n is the number of years and r is the discount rate

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