# (a) Develop pro-forma Income Statement Using Excel Spreadsheet (b) Compute Net Project Cashflows, NPV, and IRR (c) Develop problem-solving and

(a) Develop pro-forma Income Statement Using Excel Spreadsheet

(b) Compute Net Project Cashflows, NPV, and IRR

(c) Develop problem-solving and critical thinking skills and make long-term investment decisions

1) Life Period of the Equipment = 4 years 8) Sales for first year (1) \$       200,000

2) New equipment cost \$(200,000) 9) Sales increase per year 5%

3) Equipment ship & install cost \$ (35,000) 10) Operating cost (60% of Sales) \$     (120,000)

4) Related start up cost \$ (5,000)   (as a percent of sales in Year 1) -60%

5) Inventory increase \$ 25,000 11) Depreciation (Straight Line)/YR \$       (60,000)

6) Accounts Payable increase \$     5,000 12) Marginal Corporate Tax Rate (T) 21%

7) Equip. salvage value before tax \$   15,000 13) Cost of Capital (Discount Rate) 10%

Income Statement

Revenue

Operating Cost

Depreciation

DEBIT

Taxes

Net Income

YEAR CF0 CF1 CF2 CF3 CF4

0 1 2 3 4

1) Operating Cash Flow

2) Change in NWC

3) Capital spending

Total

Project Net Cash Flows

NPV = IRR = Payback=

Q#1 Would you accept the project based on NPV, IRR?

Q#2    Impact of 2017 Tax Cut Act on Net Income, Cash Flows and Would you accept the project based on Payback rule if project cut-off is 3 years?

Q#3    Impact of 2017 Tax Cut Act on Net Income, Cash Flows and Capital Budgeting (Investment ) Decisions

(a) Estimate NPV, IRR and Payback Period of the project if equipment is fully depreciated in first year and tax rate equals to 21%. Would you accept or rejec the project?

(b) As a CFO of the firm, which of the above two scenario (a) or (b) would you choose? Why?

Q#4   How would you explain to your CEO what NPV means?

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.