All yelow cells must be a formala or cell reference in order

All yelow cells must be a formala or cell reference in order to get fall credi. Cost of equipment Required working capiral Charge per wse for washers Charge per use for dryers Expected weeikly gross for washers Expected weekly gross for dryers Variable cost per use for washers Variable cost per use fo Fixed costs PER MONTH 194,000 washers, dryers, and other equipmen 56,000 sap, ec. Will be released at end of Yr 6 51.50 pe 0.5 per USE 51,800 per WE 1,125 per WEEK per USE erUSE for water and electricity USE for gas and electric 009 per Building rent $1,500 per MONTH $1,875 per Maintenance, insurance, oher Sahage valbe of equipment in 6 Required rate of retunn Weeks per year the laundromat is open 52 (1) Assuming the la undromat would be open 52 weeks a year, compute the expecte aal net cash receipts from its operations(gross cash receis less cash Average WEEKLY us of washers and Washers Per Use Per Use Expected net amal cash receips Washer cash receipts Dryer cash receips Toal cash receips Less cash disbursements Washer: water & electric Dryer: gas &electric; Rent Maitenance and other Toal cash disursements Amalnetcash receip 2) Compute the NPV for this investment. Rememiber, cash inflows are shomm as positive ambers. I did the formalis in Cola mmbers and cash outfbas are shoan as for you but you should go and look at them. (The ROUNDO Funetion will round an answer the umiber of decimal places specified after the comma. In this case it isz 12% Cash Fors Factor PV ofCash Item Ye Working capital Amalnetcash receip Savage vale of equipment Working capital released 50 50 50 50 1.000 -6 0507 0507 Net Present Vale

Solution

Cost of Equipment 194000 Required WC 6000 Charges Per use for Washer 1.5 per use Charges Per use for dryer 0.75 per use Expected Weekly GROSS for Washer 1800 per week Expected Weekly GROSS for dryer 1125 per week VC Per use for Washer 0.075 per USE fo Water & Elec. VC Per use for dryer 0.09 per USE for GAs & Elec. Fixed Cost per month Building Rent 3000 Per month Cleaning 1500 Per month Maintenance, Insurance etc. 1875 Per month Salvage Value of Equipment 10% of cost = 19400 Required rate of return 12% Weeks per year laundrymat is open 52 1 Working Note: Weekly Gross Receipts for Washer [a] 1800 Charges Per use for Washer [b] 1.5 No. of uses for washer [a/b] 1200 Uses Uses per year = 1200 uses per wk*52 wk 62400 Weekly Gross Receipts for Dryer [a] 1125 Charges Per use for Dryer [b] 0.75 No. of uses for Dryer [a/b] 1500 Uses Uses per year = 1500 uses per wk*52 wk 78000 1 Expected Annual Cash receipts Washer Cash Receipts ($1800*52wks) 93600 Dryer Cash Receipts ($1125*52wks) 58500 Total Cash Receipts 152100 Less: Cash Reimbursment Variable Cost Washer:Water & Electricity [62400 uses *0.075] 4680 Dryer : Gas & Electricity [75000 uses *$0.09] 6750 Fixed Cost per month Building Rent [$3000*12] 36000 Cleaning [1500*12] 18000 Maintenance, Insurance etc. [1875*12] 22500 Annual Cash Receipt 64170 2 Statement Showing NPV Particuars Year PVF Cash Flow PV of Cash Flow Cost of Machine 0 1 -194000 -194000 Working CApital Invested 0 1 -6000 -6000 Annual Net Cash receipt 01-06 4.111 64170 263802.9 Salvage Value of Equipment 6 0.507 19400 9835.8 Working Capital Realised 6 0.507 6000 3042 76680.67