The municipal golf course has made a budget request to remodel and upgrade the clubhouse. The project will cost $7,200,000, based on reliable estimates. The additional annual operating expenses after the upgrade are expected to be $200,000 per year. An analysis of the experiences of other municipal golf courses reveals an expected revenue increase of $1 million per year after the upgrade. The useful life of the upgraded clubhouse is estimated at 9 years, and the golf course expects to get a loan for the renovations at an interest rate of 4.25%. Should the renovations be approved? I need the answer to the cell highlighted in pink. The formula in excel please
| Year | Cash Out | Cash In | Net Cash Flow | Present Value |
| 0 | $ (7,200,000.00) | $ - | $ (7,200,000.00) | $ (7,200,000.00) |
| 1 | $ (200,000.00) | $ 1,000,000.00 | $ 800,000.00 | $ 767,386.09 |
| 2 | $ (200,000.00) | $ 1,000,000.00 | $ 800,000.00 | $ 736,101.77 |
| 3 | $ (200,000.00) | $ 1,000,000.00 | $ 800,000.00 | $ 706,092.82 |
| 4 | $ (200,000.00) | $ 1,000,000.00 | $ 800,000.00 | $ 677,307.26 |
| 5 | $ (200,000.00) | $ 1,000,000.00 | $ 800,000.00 | $ 649,695.22 |
| 6 | $ (200,000.00) | $ 1,000,000.00 | $ 800,000.00 | $ 623,208.84 |
| 7 | $ (200,000.00) | $ 1,000,000.00 | $ 800,000.00 | $ 597,802.24 |
| 8 | $ (200,000.00) | $ 1,000,000.00 | $ 800,000.00 | $ 573,431.41 |
| 9 | $ (200,000.00) | $ 1,000,000.00 | $ 800,000.00 | $ 550,054.11 |
| $ - | $ (1,318,920.24) | |||
| Rate | 4.25% | |||
| Excel f(x) | Yes | No | ||
| Should the renovations be approved? | x | |||
| Year | Cash out | Cash In | Net cashflows | PVF at 4.25% | Present Value |
| 0 | -7200000 | -7200000 | 1 | -7200000 | |
| 1 | -200000 | 10000000 | 800000 | 0.959233 | 767386.1 |
| 2 | -200000 | 10000000 | 800000 | 0.920127 | 736101.8 |
| 3 | -200000 | 10000000 | 800000 | 0.882616 | 706092.8 |
| 4 | -200000 | 10000000 | 800000 | 0.846634 | 677307.3 |
| 5 | -200000 | 10000000 | 800000 | 0.812119 | 649695.2 |
| 6 | -200000 | 10000000 | 800000 | 0.779011 | 623208.8 |
| 7 | -200000 | 10000000 | 800000 | 0.747253 | 597802.2 |
| 8 | -200000 | 10000000 | 800000 | 0.716789 | 573431.4 |
| 9 | -200000 | 10000000 | 800000 | 0.687568 | 550054.1 |
| Net Present value | -1318920 | ||||
| Project Must not be approved | NO | ||||
The municipal golf course has made a budget request to remodel and upgrade the clubhouse. The...
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