w9 excel model

What is the project's MIRR? r = 10.00% 0 Year Cash flows O a. 22.51% O b. 11.75% O c. 17.21% O d. 14.81% O e. 15.65% -$875 1 $300 2 $320 3 $340 $360

Vd Subject: acounting

Year Initial Cost & Carrying amount Annual net cash flows Annual net profit 0  $                            150,000.00     1  $                              70,000.00  $                 50,000.00  $        15,000.00 2  $                              42,000.00  $                 45,000.00  $        17,000.00 3  $                              21,000.00  $                 40,000.00  $        19,000.00 4  $                                7,000.00  $                 35,000.00  $        21,000.00 5  $                                           -    $                 30,000.00  $        23,000.00 1.  Terrys titles ltd is reviewing a capital investment proposal.The inital cost of the project and the net cash flows for every year presented in the schedule above. It is estimate that there would be no salvage value at the end of the investments life.Terry's uses a required rate of return of 10 per cent to evaluate new capital investment proposals.       a. Calculate the…

The project's NPV?  WACC: 10.00%       Year 0     1   2   3   Cash flows -$1,000 $450 $460 $470

Baltusrol Inc. has the following three investment opportunities. A P70,000 10,000 B Initial investment Initial working capital required Cash inflows by year: Year 1 P70,000 5,000 P70,000 8,000 P35,000 35,000 10,000 5,000 8,000 P83.000 P1,250 P35,000 10,000 45.000 20,000 2,000 P112.000 P10,000 P4,000 8,000 10,000 98,000 5.000 P125.000 P12,500 Year 2 Year 3 Year 4 Released working capital Total Average annual income Required: 1. Rank the investment opportunities in order of desirability using. A. Payback period. B. Average book rate of return (use average net book value of the investment as the denominator), and C. NPV using a 16% discount rate. 2. Determine the profitability index for each opportunity and rank the investments based on these values.

Answer in Excel, Attached it question.

D Open recovered wor x✓ fx 0 A B C D E F OMEGA PROJECT CASH FLOW INFORMATION Year Inflow Outflow = Newflow 0 1 2 3 G -$225,000 -$190,000 $150,000 $190,000 $215,000 $175,000 $197,000 $70,000 $582,000 $225,000 0 $190,000 $150,000 0 $220,000 $30,000 4 $215,000 0 5 $205,000 $30,000 6 $197,000 0 7 $100,000 $30,000 Total $1,087,000 $505,000 Required ROI 18% Project Omega NPV (Year 0) Project Omega Total NPV Which of the two projects would you fund and why? ▶ 3T Company Data + Ready have on project selection? (Reference Section 2.4, pg 38-39) 19 MAY 910 30 H NPV I K L M N O ALPHA PROJECT CASH FLOW INFORMATION Year Inflow Outflow = 0 1 $50,000 2 $150,000 3 $250,000 4 $250,000 5 $200,000 6 $180,000 7 $120,000 Total $ 1,200,000 Required ROI Project Alpha NPV (Year 1). Project Alpha NPV 1 tv $300,000 $100,000 0 $50,000 0 $50,000 0 $30,000 $530,000 18% d P Newflow -$300,005 -$50,000 $150,000 $200,000 $250,000 $150,000 $180,000 $90,000 $670,000 A Q NPV

Discount Rate 12%         Investment Project Cash Flow Total Net Cash Flow Initial Investment  $           (8,000)  ?  Year 1  $                800 ? Year 2  $                900 ? Year 3  $            1,500 ? Year 4  $            1,800 ? Year 5  $            3,200         NPV of investment $ ? Estimated Payback Period ?       Estimate the total net cash flows, NPV of Investment and Estimated Payback Period using the excel's formula.

5 Year Cash Flow (X) Cash Flow (Y) -$ -$ 0 21,000 21,000 1 9,100 10,600 12.5 2 9,600 8,050 points 3 9,050 8,950 eBook Hint References Calculate the IRR for each project. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Project X Project Y % % Mc What is the crossover rate for these two projects? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Crossover rate %

($ thousands) Present value at 19% Net cash flow Net present value 0 1 4 -13,700 -1,594 -13,700 -1,339 3,541 (sum of PVs). Period 2 3 6 3,057 6,433 10,644 10,095 5,867 2,159 3,817 5,308 4,230 2,066 5 7 3,379 1,000 Restate the above net cash flows in real terms. Discount the restated cash flows at a real discount rate. Assume a 19% nominal rate and 11% expected inflation. NPV should be unchanged at +3,541, or $3,541,000. Note: Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in thousands rounded to the nearest whole number. Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Real Net Cash Flows NPV

A B C D E F G H 1 Create a income statement and show net cashflow each year for the 4 years so you can use it for what-if analysis. 2 3 Base case Inputs: 4 5 6 4-year life of the project $26/unit Sales price of product 7 $13/unit Cost to produce the product 8 $1450/year operating costs 9 1250 units First-year production 16% Increase in production each year 1012345167819202123 24 25 26 14 Answer the following question for "what if analysis" 16 What is the IRR for the Base case? 17 $32,000 Initial investment depreciated with MACRS 3 year recovery 28% tax rate What is the IRR if the volume produced does not increase by 16%/year, but only increased 10%/yr.? What is the IRR if the sales price is only $24/unit? What is the IRR if the tax rate increases to 49%? 20 What is the IRR if the initial investment is $39,000? 18 19 22 Which analysis should your company be most concerned about? I J k

Problem 1: Consider the following cash flows and assume i = 10% for all analyses purposes: Project Cash Flows A D -$2,500 -$7,000 -$5,000 -$5,000 1 $650 -$2,500 -$2,000 -$500 2 $650 -$2,000 -$2,000 -$500 $650 -$1,500 -$2,000 $4,000 4 $600 -$1,500 -$2,000 $3,000 5 $600 -$1,500 -$2,000 $3,000 $600 -$1,500 -$2,000 $2,000 7 $300 -$2,000 $3,000 8 $300 a) Compute the project balances for Projects A and D, as a function of project year b) Compute the future worth values for Projects A and D at the end of service life. c) Suppose that Projects B and C are mutually exclusive. Assume also that the required service period is eight years and that the company is considering leasing comparable equipment that has an annual lease expense of $3,000 for the remaining years of the required service period for both projects. Which project is the better choice?

Mj Subject: economics

How do you calculate the NPV and IRR   Project 1     Year Cashflows Discount Rate  10%     0  $                 (750,000.00)         1  $                   250,000.00         2  $                   300,000.00         3  $                   350,000.00         4  $                   200,000.00         5  $                   100,000.00                                             Project 2     Year Cashflows Discount Rate 10%     0  $             (1,000,000.00)         1  $                   200,000.00         2  $                   300,000.00         3  $                   400,000.00         4  $                   500,000.00         5  $                   700,000.00

man.4

What is the IRR of the following set of cash flows? Year Cash Flow -$ 0 10,512 123 7,000 4,800 3,300 Multiple Choice 22.7% 25.09% 24.38% 23.9% 23.42%

* l 48% 2:55 pm Document (52) ment Time verue of Money -18 UNEVEN CASH FLOW STREAM Find the present values of the following cash flow streams at 8% compounded annually. a. 1 2 + $400 3 4 5 $0 $0 Stream A $100 $400 $400 $300 Stream B $300 $400 $400 $400 $100 b. What are the PVs of the streams at 0% compounded annually? S-19 FUTURE VALUE OF AN ANNUITY Your client is 40 years old; and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $5,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average retum of 9% in the future. a. If she follows your advice, how much money will she have at 65? b. How much will she have at 70? c. She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to eam the same rate, how much will she be able to withdraw at the end of each year aftor retirement at each retirement age?:ndows G

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The Lost in Space corporation is trying to finally build a space ship that won't end up stranding everyone on it in some random part of the galaxy. To do so they are considering a new three-year project that will require an initial investment of $400 million. These initial assets will be depreciated straight-line to zero over their three-year tax life. The firm will be able to sell these assets at the end of the project for $45,250,000. The project is estimated to generate the following revenues during it's three year life: $315,485,369 in year one, $325,690,023 in year two, and $344,555,000 in year three. The firm expects that their costs will be equal to 47.75% of the projects same year revenues. They expect that project net working capital (in the form of inventory required) will be equal to 10.25% of the next year's revenue. The firms tax-rate is 21%. What are the project's cash flows from assets for years 0-3? What is the IRR on this project? Use available Excel template and…

ook rint rences Project A B C Co -2,600 -5,200 -6,500 C₁ 2,600 2,600 2,600 Cash Flows ($) (8 C₂ 0 Project A Project B Project C 2,600 2,500 Required A Required B Required C 0 5,600 0 year(s) year(s) year(s) Calculate the payback period for each project. Note: Round your answers to 2 decimal places. C4 0 a. If the opportunity cost of capital is 10%, which project(s) have a positive NPV? b. Calculate the payback period for each project. c. Which project(s) would a firm using the payback rule accept if the cutoff period is three years?

Subject: acounting

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