Question

Solve the problems below using
well-formatted Excel solutions. Do not hardcode numbers in the
formulas…..only use cell references to the input data. I will
change the input data in your problem to check alternate solutions.
You will turn in a complete working Excel spreadsheet with your
solution. |
||||||||||||||

1. A firm is considering the two mutually
exclusive investments projects. Project Alpha requires an initial
outlay of $600 and will return $160 per year for the next seven
years; Project Beta requires an initial outlay of $1,100 and will
return $350 per year for the next five years. Assuming a 11%
required return, calculate the NPV, IRR, Payback Period, PI, and
MIRR of each project. Which project is preferable and what
factors led you to come to this conclusion? |

Answer #1

We should choose Project Beta as it has higher NPV

Solve
the problems below using well-formatted Excel solutions. Do not
hardcode numbers in the formulas…..only use cell references to the
input data. I will change the input data in your problem to check
alternate solutions. You will turn in a complete working Excel
spreadsheet with your solution.
1. A firm is
considering the two mutually exclusive investments projects.
Project Alpha requires an initial outlay of $600 and will return
$160 per year for the next seven years; Project Beta requires...

Solve the problems below using well-formatted
Excel solutions. Do not hardcode numbers in the formulas…..only use
cell references to the input data. I will change the input data in
your problem to check alternate solutions. You will turn in a
complete working Excel spreadsheet with your solution.
1) What is the price of a
semiannual $1,000 par value bond with four years left until
maturity that pays a coupon of 3.75% and is yielding 5.25%? What
would it be yielding...

A firm is considering the two mutually exclusive investments
projects. Project Alpha requires an initial outlay of $600 and will
return $160 per year for the next seven years; Project Beta
requires an initial outlay of $1,100 and will return $350 per year
for the next five years. Assuming a 11% required return, calculate
the NPV, Payback Period, and MIRR of each project.
Please help by showing Excel calculations. Thanks!

If your able to work out the problems instead of using excel
since excel isnt accessible on the exam.
Consider the following projects, for a firm using a discount
rate of 10%. If the projects are mutually exclusive,
which, if any, project(s) should the firm accept?
Project
NPV
IRR
PI
E
$200,000
10.2%
1.04
F
$(200,001)
11%
.81
G
$1
10%
1.01
H
$(235,000)
9%
.95
a.
E
b.
F
c.
H
d.
F and H
You are considering two...

You are required to use a financial calculator or spreadsheet
(Excel) to solve the following capital budgeting problem (sample
questions and solutions are provided for guidance): Kingston Corp.
is considering a new machine that requires an initial investment of
$520,000 installed, and has a useful life of 8 years. The expected
annual after-tax cash flows for the machine are $76,000 during the
first 3 years, $87,000 during years 4 through 6 and $92,000 during
the last two years. (i) Develop...

You are required to use a financial calculator or spreadsheet
(Excel) to solve the following capital budgeting problem (sample
questions and solutions are provided for guidance): Windrunner
Corp. is considering a new machine that requires an initial
investment of $800,000 installed, and has a useful life of 10
years. The expected annual after-tax cash flows for the machine are
$120,000 during the first 5 years, $150,000 during years 6 through
8 and $180,000 during the last two years.
(i) Develop...

(a) Develop
proforma Project Income Statement Using Excel Spreadsheet
(b) Compute Net Project Cash
flows, NPV, IRR and PayBack Period
(c) Develop Problem-Solving
and Critical Thinking Skills
1) Life Period of the
Equipment = 4 years
8) Sales for first year (1)
$ 200,000
2) New equipment cost
$ (200,000)
9) Sales increase per year
5%
3) Equipment ship &
install cost
$ (35,000)
10) Operating cost:
$ (120,000)
4) Related start up cost
$ (5,000)
(60 Percent of...

1. Learning Objectives
(a) Develop proforma Project Income
Statement Using Excel Spreadsheet
(b) Compute Net Project Cash
flows, NPV, IRR and PayBack Period
1) Life Period of the Equipment = 4 years
8) Sales for first year (1)
$ 200,000
2) New equipment cost
$ (200,000)
9) Sales increase per year
4%
3) Equipment ship & install cost
$ (25,000)
10) Operating cost:
$ (120,000)
4) Related start up cost
$ (5,000)
(60 Percent of Sales)
-60%
5) Inventory increase
$ 25,000
11) Depreciation (Straight Line)/YR
$ (60,000)
6) Accounts Payable...

1. Learning Objectives
(a) Develop proforma Project Income
Statement Using Excel Spreadsheet
(b) Compute Net Project Cash
flows, NPV, IRR and PayBack Period
1) Life Period of the Equipment = 4 years
8) Sales for first year (1)
$ 200,000
2) New equipment cost
$ (200,000)
9) Sales increase per year
4%
3) Equipment ship & install cost
$ (25,000)
10) Operating cost:
$ (120,000)
4) Related start up cost
$ (5,000)
(60 Percent of Sales)
-60%
5) Inventory increase
$ 25,000
11) Depreciation (Straight Line)/YR
$ (60,000)
6) Accounts Payable...

1. Learning Objectives
(a) Develop proforma Project Income
Statement Using Excel Spreadsheet
(b) Compute Net Project Cash
flows, NPV, IRR and PayBack Period
1) Life Period of the Equipment = 4 years
8) Sales for first year (1)
$ 200,000
2) New equipment cost
$ (200,000)
9) Sales increase per year
4%
3) Equipment ship & install cost
$ (25,000)
10) Operating cost:
$ (120,000)
4) Related start up cost
$ (5,000)
(60 Percent of Sales)
-60%
5) Inventory increase
$ 25,000
11) Depreciation (Straight Line)/YR
$ (60,000)
6) Accounts Payable...

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