Question: The Excel worksheet form that appears below
The Excel worksheet form that appears below is to be used to recreate Example E and Exhibit 13–8. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet form. 
You should proceed to the requirements below only after completing your worksheet. Note that you may get a slightly different net present value from that shown in the text due to the precision of the calculations. Required: 1. Check your worksheet by changing the discount rate to 10%. The net present value should now be between $56,495 and $56,518—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. Explain why the net present value has increased as a result of reducing the discount rate from 14% to 10%. 2. The company is considering another project involving the purchase of new equipment. Change the data area of your worksheet to match the following: Data Example E Cost of equipment needed ……………………………………….$120,000 Working capital needed ………………………………………….. $80,000 Overhaul of equipment in four years ……………………….. $40,000 Salvage value of the equipment in five years ……………..$20,000 Annual revenues and costs: Sales revenues ………………………………………………………. $255,000 Cost of goods sold ……………………………………………………$160,000 Out-of-pocket operating costs……………………………………..$50,000 Discount rate……………………………………………………………………..14%
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The Net Present Value Method-An Extended Example B E F Year Now 1 2 3 4 5 $ (60,000) $ (100,000) 3 Purchase of equipment 4 Investment in working capital 5 Sales 6 Cost of goods sold 7 Out-of-pocket costs for salaries, advertising, etc. 8 Overhaul of equipment 9 Salvage value of the equipment $ 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 $(125,000) $(125,000) $(125,000) S(125,000) S(125,000) $ (35,000) $ (35,000) $ (35,000) $ (35,000) S (35,000) $ (5,000) $ 10,000 S 100,000 $ (160,000) S 40,000 $ 40,000 S 40,000 S 35,000 $ 150,000 10 Working capital released 11 Total cash flows (a) 12 Discount factor (14%) (b) 13 Present value of cash flows (a) x (b) 1.000 0.877 0.769 0.675 0.592 $ 0.519 $ (160,000) $ 35,080 $ 30,760 $ 27,000$ 20,720 $ 77,850 31,410 14 Net present value (SUM B13:G13) 15 16 Note: The discount factors come from Exhibit 13B-1 in Appendix 13B. 17 H Ehbt 13-3 Exhbt 134 Exhbt 13-5 Exhbt 13-6 Exhbit 13-7 Exhibit 13-8 Eshbe
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> O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials ...................................................
> The Excel worksheet form that appears below is to be used to recreate the main example in the text pertaining to Colonial Pewter Company. Download the workbook containing this form from Connect, where you will also receive instructions about how to use t
> The Excel worksheet form that appears below is to be used to recreate the example in the text related to Santa Maria Wool Cooperative. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this
> The Excel worksheet form that appears below is to be used to recreate the Review Problem pertaining to the Magnetic Imaging Division of Medical Diagnostics, Inc.Download the workbook containing this form from Connect, where you will also receive instruct
> The Excel worksheet form that appears below is to be used to recreate the main example in the text pertaining to Colonial Pewter Company. Download the workbook containing this form from Connect, where you will also receive instructions about how to use t
> The Excel worksheet form that appears below is to be used to recreate the Review Problem relating to Harrald’s Fish House. Download the workbook containing this form from Connect, where you will also receive instructions about how to us
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> The Excel worksheet form that appears below is to be used to recreate the Review Problem related to Mynor Corporation. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet form.
> The Excel worksheet form that appears below is to be used to recreate the Review Problem pertaining to Ferris Corporation. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet f
> The Excel worksheet form that appears below is to be used to recreate portions of Review Problem 1 relating to Dexter Corporation. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this wo
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> Refer to the data for Carmono Company in Exercise 14–6. Data.given.in.Exercise.14-6: Comparative.financial.statement.data.for.Carmono.Company.follow: For this year the company reported net income as follows: Sales…
> Kelly Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable cost per unit: Direct materials .....................................................................$1
> Refer to the data for Pavolik Company in Exercise 14–4. Data given in Exercise 14–4: The following changes took place last year in Pavolik Company’s balance sheet accounts: Long-term investments tha
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> Why is it a good idea to create a “Budgeting Assumptions” tab when creating a master budget in Microsoft Excel?
> What are the two stages of allocation in activity-based costing?
> If the units produced equals the units sold, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why?
> Why aren’t transactions involving accounts payable considered to be financing activities?
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> What general guidelines can you provide for interpreting the statement of cash flows?
> Sunk costs are easy to spot—they’re the fixed costs associated with a decision.” Do you agree? Explain.
> Stahl Company is conducting a time-driven activity-based costing study in its Shipping Department. To aid the study, the company provided the following data regarding its Shipping Department and the customers served by the department: Required: 1. Usin
> Refer to the data in Exercises 7A–1 and 7A–2. Now assume that Saratoga Company would like to answer the following “what if” question using its time-driven activity-based costing syst
> Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: Selling price per unit on the intermediate market ……………………………….$60 Variable costs per unit……………………………………
