Use the template spreadsheet and 8-step process to enter the above assumptions in the appropriate cells.

Compute the Net Present Value of Future Cash Flows, and the Internal Rate of Return. Highlight in yellow those two answers on your spreadsheet. Note those answers in the table below so that they are in both places.

Note at the bottom of the schedule whether this is an attractive project from a purely financial point of view based upon the numbers that you calculated on the spreadsheet. Why did you make that decision? Note your answers in the table below so that they are in both places.

Optional Additional Point Opportunity:

Copy your spreadsheet tab with your answer and label the new tab “Six Years”. Add a Year 6 column and assume that year six cash inflows and outflows will be the same as year 5, with the exception that the equipment will be sold for $35,000 at the end of year 6 instead of $50,000 at the end of year 5. Adjust any formulas in the cells as appropriate caused by the addition of a year 6. Compute the new Net Present Value and Internal Rate of Return for this six-year project. Highlight those answers in yellow on your spreadsheet. Note those answers in the table below so that they are in both places.