five year period using straight line depreciation ($ 7mm B u s i n e s s F i n a n c e

I need the list of missing elements added to my existing paper per the feedback from my instructor…PLEASE DO NOT SKIP OVER ANY OF THE MISSING ELEMENTS FROM THE LIST BELOW BECAUSE THIS IS MY LAST CHANCE TO FIX THIS ASSIGNMENT

PLEASE MAKE SURE TO HIGHLIGHT ALL CHANGES IN YELLOW

FEEDBACK FROM INSTRUCTOR:

Project A: Major Equipment Purchase

• A new major equipment purchase, which will cost $10 million; however, it is projected to reduce cost of sales by 5% per year for 8 years. In other words, the 60% cost of sales needs to be reduced by 5% per year, i.e. year 1 should be 55%, Year 2 50%, Year 3 45% and so on until year 8. THE COST OF SALES MUST BE REDUCED BY 5% PER YEAR. IT IS NOT CONSTANT.
• The equipment is projected to be sold for salvage value estimated to be $500,000 at the end of year 8.The salvage value adjusted for taxes must be clearly presented in your spreadsheet. Being a relatively safe investment, the required rate of return of the project is 8%
• .The equipment is projected to be sold for salvage value estimated to be $500,000 at the end of year 8. The salvage value must be adjusted for taxes at the end of year 8. THIS WAS NOT DONE. YOU NEED TO PUT THE AFTER TAX SALVAGE VALUE AT THE END OF YEAR 8 AS AN IFLOW.
• Being a relatively safe investment, the required rate of return of the project is 8%.
• The equipment will be depreciated at a MACRS 7-year schedule.
• Annual sales for year 1 are projected at $20 million and should stay the same per year for 8 years.
• Before this project, cost of sales has been 60%.
• The marginal corporate tax rate is presumed to be 25%.

Project B: Expansion into Europe

• Expansion into Western Europe has a forecast to increase sales/revenues and cost of sales by 10% per year for 5 years.
• Before this project, the cost of sales has been 60%.
• Annual sales for the previous year were $20 million.
• Start-up costs are projected to be $7 million and an upfront needed investment in net working capital of $1 million. The working capital amount will be recouped at the end of year 5. Please note that start up costs must be AMORTIZED using straight line depreciation. START UP COSTS MUST BE AMORTIZED OVER THE FIVE YEAR PERIOD USING STRAIGHT LINE DEPRECIATION ($7MM/5 )
• Because of the higher European tax rate, the marginal corporate tax rate is presumed to be 30%.
• Being a risky investment, the required rate of return of the project is 12%.

Project C: Marketing/Advertising Campaign

• A major new marketing/advertising campaign, which will cost $2 million per year and last 6 years.
• Before this project, the cost of sales has been 60%.
• It is forecast that the campaign will increase sales/revenues and costs of sales by 15% per year.
• Annual sales for the previous year were $20 million.
• The marginal corporate tax rate is presumed to be 25%.
• Being a moderate risk investment, the required rate of return of the project is 10%.