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PART C PART B PART A WORKING CAPITAL NEEDS RENT CLEANING YEAR ONE YEAR TWO YEAR THREE YEAR FOUR YEAR FIVE YEAR SIX YEARS PROCEEDS LESS TAX BASIS OF EQUIPMENT: COST TAX BASIS GAIN ON SALVAGE TOTAL INITIAL INVESTMENT INTERNAL RATE OF RETURN TAX RATE COMPREHENSIVE CHAPTER 12 & 13 PROBLEMS COST OF THE EQUIPMENT NEEDED NEW WORKING CAPITAL NEEDS PROJECTED NEW REVENUES: WILL BE RECOVERED AT THE END OF THE THIRD YEAR SALES PROBABILITY COST OF GOOD SOLD OF SALES EQUIPMENT DISPOSAL PROCEEDS SALVAGE VALUE AT THE END OF YEAR 6 DEPRECIATION RATES FOR TAX PURPOSES: FIVE YEAR PROPERTY FOR TAX DEPRECIATION LESS COST OF GOODS SOLD GROSS PROFIT VARIABLE CASH COSTS ANNUAL FIXED CASH COSTS: LESS VARIABLE COSTS LESS FIXED COSTS TOTAL FIXED COSTS REQUIRED: NET PRESENT VALUE AT THE DATA FOR ANALYSIS IS PRESENTED BELOW: FIRM’S COST OF CAPITAL AND REDO THE COMPUTATIONS BY CHANGING THE ANNUAL SALES TO $250,000. AND REDO THE COMPUTATIONS BY CHANGING THE ANNUAL SALES TO $300,000. PART A AT BOTH THE FIRM’S DISCOUNT RATE AND 16%, WHICH IS A 4% PREMIUM ADDED TO THE RATE. ASSUMPTIONS: ALL CASH FLOWS IN YEARS 1-6 OCCUR AT THE END OF THE YEAR. ALL INITIAL CASH INFLOWS OR OUTFLOWS OCCUR TODAY. MGT 325 Module 6 Spreadsheet Exam Answer is in %-2 decimal places please. Answer is in $-round answer to nearest dollar. THREE METHODS OF EVALUATION: ANNUAL OPERATING RECEIPTS: B. COPY THE WHOLE WORKSHEET AND SOLUTIONS FOR PART A TO THE WORKSHEET NAMED PART B, C. COPY THE WHOLE WORKSHEET AND SOLUTIONS FOR PART A TO THE WORKSHEET NAMED PART C, MAINTENANCE & OTHER NOTE – WHEN COMPUTING TAX, A NET LOSS FOR THE YEAR MEANS A POSITIVE TAX SAVINGS IS CREATED SINCE THERE IS OTHER INCOME TAX ON OTHER INCOME TO OFFSET. A. ASSUMING SALES ARE $200,000 COMPUTE THE PAYBACK, IRR AND NPV. FOR THE NPV, COMPUTE You should place your answers in each of the boxes…
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