Spreadsheet Problem Chapter 12 Presented by: Ruth LadurnerSchniter and Clayton Healy

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Spreadsheet ProblemChapter 12Presented by
Ruth Ladurner-Schniterand Clayton Healy

• In Book
• P.444 12-11

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Part 1 Inputting the Data
Information Given In the Problem
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Part 2Depreciation and Amortization Schedule
What we needed to find
Equipment Depr'n Rate
These Rate we fond on Page 417 of text Table
12-2 . We used the first 4 rates of year 5
schedule.
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Equipment Depr'n, Dollars
DR1(Equipment cost)
20(10,000)2000
Repeat for all years
5

Ending Book Value Cost -
Accum Depr'n
1) First we need to SUM all the Equip. Deprn
Dollar amount

2) Now we can compute. As follows
Initial cost (The Sum of Equip. Deprn dollar
amount)
10,000 - 8,300 1700
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What the excel chart looks like
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Part 3Net Salvage Values, in Year 4
First we need the Estimated Market Value in Year
4 which is given 500
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Part 3Net Salvage Values, in Year 4 continued
We then need to calculate the Taxes paid or tax
credit. we can find this by
(Expected Gain or loss) (Tax rate) -1200
(0.4) ? -480
Now we can find the net cash flow from salvage.
Calculated as follows.
(estimated market value) - (taxes paid)
- 500-(-480)
980
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1 2
3 4
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Part 5 Key Output Appraisalof the proposed
Project
- To find NPV at 10
n
? (CFt)/(1r)t
t0
- To find IRR
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Part 5 Key Output Appraisal of the proposed
Project
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Part 7 Evaluating Risk Scenario Analysis