ease show the work on excel:

| June 5, 2016

Question
Please show the work on excel:

-The equipment cost is $50,000 and it would cost another $10,000 to modify it. Assume that the equipment falls into the MACRS 3-year class. The equipment will be sold after 3 years for $20,000. It would require an increase in net working capital of $2,000 at the start of the project. This working capital would be recovered at the end of the project. The new project will not have an effect on revenues but it is expected to save the firm $20,000 per year in before-tax operating costs, mainly labor. The tax rate is 40%.
1.What is the cash flow at time=0?
2.What are the operating cash flows in Years 1-3?
3.What is the terminal cash flow in Year 3?
4.What is the book value of the asset at the end of Year 2?
5.What is the depreciation expense for Year 2?
6.The cost of capital is 10%. What are the NPV and IRR of the project? Should the equipment be purchased?

-1.Suppose that ABC Company purchased $10000 of machinery 3 years ago. The machinery is 5-year MACRS property. The firm is selling this equipment today for $5000. What is the aftertax cash flow from this sale if the tax rate is 30%?
2.Suppose that ABC Company purchased $10000 of machinery 4 years ago. The machinery is 5-year MACRS property. The firm is selling this equipment today for $5000. What is the aftertax cash flow from this sale if the tax rate is 30%?
3.Suppose that ABC Company purchased $10000 of machinery 5 years ago. The machinery is 5-year MACRS property. The firm is selling this equipment today for $5000. What is the aftertax cash flow from this sale if the tax rate is 30%?

The MACRS allowance percentages are as follows, commencing with year one: 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, 5.76%.

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