Question

Question Two [6 marks] (a) Use an EXCEL spread sheet to calculate the Net Present Value...

Question Two [6 marks]
(a) Use an EXCEL spread sheet to calculate the Net Present Value and Discounted Payback Period of the following project at 20.00% per annum e?ective. [4 marks]
Date Cash flow
25/08/2000 -1,000,000
25/11/2000 -100,000
25/03/2001 160,968
25/09/2001 161,936
25/03/2002 162,904
25/09/2002 163,872
25/03/2003 164,840
25/09/2003 165,808
25/03/2004 166,776
25/09/2004 167,744
25/03/2005 168,712
25/09/2005 169,680
(b) Use your spread sheet to determine the internal rate of return correct to 0.1% per annum. [2 marks]

Homework Answers

Answer #1

a) We are using Excel function XNPV, to calculate the Net present value of cash flows (as dates are given)

Net Present Value = -79584.60

As the project has a negative NPV, it will not have a discounted payback period because the initial outlay will never be fully recovered.

b) For calculating the IRR i.e., Internal rate of return for the project we use the excel function - XIRR

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Question Two [6 marks] (a) Use an EXCEL spread sheet to calculate the Net Present Value...
Question Two [6 marks] (a) Use an EXCEL spread sheet to calculate the Net Present Value and Discounted Payback Period of the following project at 20.00% per annum e?ective. [4 marks] Date Cash flow 25/08/2000 -1,000,000 25/11/2000 -100,000 25/03/2001 160,968 25/09/2001 161,936 25/03/2002 162,904 25/09/2002 163,872 25/03/2003 164,840 25/09/2003 165,808 25/03/2004 166,776 25/09/2004 167,744 25/03/2005 168,712 25/09/2005 169,680 (b) Use your spread sheet to determine the internal rate of return correct to 0.1% per annum. [2 marks]
Use the below information to calculate a company’s equity value per share: Use discounted cash flow...
Use the below information to calculate a company’s equity value per share: Use discounted cash flow analysis (5 year). ABC Co has weighted average cost of capital of 12%. Net debt of $229 (in millions). Perpetuity growth rate of 1.85% Outstanding shares $210 million Cash Flow projections: 2000 2001 2002 2003 2004 Unlevered Cash Flow 196.55 201 257.34 294.18 301.15
(For this part, you MUST present sufficient solution steps, and MUST apply specific Excel functions =NPV(…),...
(For this part, you MUST present sufficient solution steps, and MUST apply specific Excel functions =NPV(…), =IRR(…), =AVERAGE(…), =YIELD(…) whenever applicable. We are given the information that Microthin’s stock price was $21 in December 2013, $29 in December 2014, $27 in December 2015, $20 in December 2016, and $26 in December 2017. It also pays annual dividend amounts varying from 2013 through 2017. Let's assume you do the following transactions: a) In December 2013: buy 30,000 Microthin shares; b) In...
During the trial, lawyers for the accused said that the men believed that the accounting decisions...
During the trial, lawyers for the accused said that the men believed that the accounting decisions they made were appropriate at the time, and that the accounting treatment was approved by Nortel’s auditors from Deloitte & Touche. Judge Marrocco accepted these arguments. Marrocco added he was “not satisfied beyond a reasonable doubt” that the trio (i.e., Dunn, Beatty, and Gollogly) had “deliberately misrepresented” financial results. Given the facts of the case, do you believe Judge Marrocco’s decision was justified? Explain....
What role could the governance of ethics have played if it had been in existence in...
What role could the governance of ethics have played if it had been in existence in the organization? Assess the leadership of Enron from an ethical perspective. THE FALL OF ENRON: A STAKEHOLDER FAILURE Once upon a time, there was a gleaming headquarters office tower in Houston, with a giant tilted "£"' in front, slowly revolving in the Texas sun. The Enron Corporation, which once ranked among the top Fortune 500 companies, collapsed in 2001 under a mountain of debt...
Discuss ethical issues that can be identified in this case and the mode of managing ethics...
Discuss ethical issues that can be identified in this case and the mode of managing ethics Enron finds itself in this case. How would you describe the ethical culture and levels of trust at Enron? Provide reasons for your assessment. THE FALL OF ENRON: A STAKEHOLDER FAILURE Once upon a time, there was a gleaming headquarters office tower in Houston, with a giant tilted "£"' in front, slowly revolving in the Texas sun. The Enron Corporation, which once ranked among...
Discuss how the respective organizations’ relations with stakeholders could have potentially been affected by the events...
Discuss how the respective organizations’ relations with stakeholders could have potentially been affected by the events that took place at Enron and how the situation could have been dealt with differently to prevent further damage? THE FALL OF ENRON: A STAKEHOLDER FAILURE Once upon a time, there was a gleaming headquarters office tower in Houston, with a giant tilted "£"' in front, slowly revolving in the Texas sun. The Enron Corporation, which once ranked among the top Fortune 500 companies,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT