Check my Required information a. What is the net present value of the project? (Negative amount should be indicated by a minus sign. Round your present value factor to 3 decimals and round all other intermediate calculations to nearest whole dollar.) Net present value $ 2,859,330 c. The internal rate of return is between what two whole discount rates (e.g., between 10% and 11%, between 11% and 12%, between 12% and 13%, between 13% and 14%, etc.? The internal rate of retum is between and d. Reset the discount rate to 17%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value? Minumum salvage value required to generate a positive present value

Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter27: Time Value Of Money (compound)
Section: Chapter Questions
Problem 1R
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Check my
Required information
a. What is the net present value of the project? (Negative amount should be indicated by a minus sign. Round your present value
factor to 3 decimals and round all other intermediate calculations to nearest whole dollar.)
Net present value
2,859,330
c. The internal rate of return is between what two whole discount rates (e.g., between 10% and 11%, between 11% ond 12%, between 12%
and 13%, between 13% and 14%, etc.)?
The internal rate of returm is belween
and
d. Reset the discount rate to 17%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a
positive net present value?
Minimum salvage value required to generata a positivo present value
Transcribed Image Text:Check my Required information a. What is the net present value of the project? (Negative amount should be indicated by a minus sign. Round your present value factor to 3 decimals and round all other intermediate calculations to nearest whole dollar.) Net present value 2,859,330 c. The internal rate of return is between what two whole discount rates (e.g., between 10% and 11%, between 11% ond 12%, between 12% and 13%, between 13% and 14%, etc.)? The internal rate of returm is belween and d. Reset the discount rate to 17%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value? Minimum salvage value required to generata a positivo present value
Chapter 12: Applying Excel: Exercise (Part 2 of 2) (Algo)
2. The company is considering a project involving the purchase of new equipment. Change the data area of your worksheet to match
the following: Use Exhibit 128-1 and Exhibit 128-2. (Use appropriate factor(s) from the tables provided.)
A
B.
Chapter 12: Applying Excel
2
Data
4
Example E
Cost of equipment needed
430,000
45,000
35,000
20,000
6.
Working capital needed
Overhaul of equipment in four years
8.
Salvage value of the equipment in five years
$4
9.
Annual revenues and costs:
435,000
10
Sales revenues
11
Cost of goods sold
245,000
Out-of-pocket operating costs
%24
50,000
12
13
Discount rate
17 %
Transcribed Image Text:Chapter 12: Applying Excel: Exercise (Part 2 of 2) (Algo) 2. The company is considering a project involving the purchase of new equipment. Change the data area of your worksheet to match the following: Use Exhibit 128-1 and Exhibit 128-2. (Use appropriate factor(s) from the tables provided.) A B. Chapter 12: Applying Excel 2 Data 4 Example E Cost of equipment needed 430,000 45,000 35,000 20,000 6. Working capital needed Overhaul of equipment in four years 8. Salvage value of the equipment in five years $4 9. Annual revenues and costs: 435,000 10 Sales revenues 11 Cost of goods sold 245,000 Out-of-pocket operating costs %24 50,000 12 13 Discount rate 17 %
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