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Below are four cases that you will have to solve using Excel spreadsheets. 3rd Case The company MEGAMAX SA is analyzing two possibilities to expand the market , one of them is to choose to expand the plant to be able to produce a greater number of products, the other option is to diversify production with different new products to take advantage of the facilities that currently owns; The information and projections you have to be able to carry out the analysis to make a decision are the following: PROJECT Diversification Extension Initial It is requested: investment Concept $900,000 Year 1 cash flows Year 2 cash flows INCOME $550,000 EXPENSES $600,000 INCOME $1,100,000 $900,000 $810,000 EXPENSES $400,000 $500,000 5. Determine the internal rate of return. 6. Determine the present value. 7. Determine the recovery period. 8. Define which is the most viable project. $1,000,000 $400,000 The discount rate for the project will be 12%, and investors propose a MARR of 28%. Year 3 cash flows $1500,000 $500,000 $750,000 $600,000

Below are four cases that you will have to solve using Excel spreadsheets. 3rd Case The company MEGAMAX SA is analyzing two possibilities to expand the market , one of them is to choose to expand the plant to be able to produce a greater number of products, the other option is to diversify production with different new products to take advantage of the facilities that currently owns; The information and projections you have to be able to carry out the analysis to make a decision are the following: PROJECT Diversification Extension Initial It is requested: investment Concept $900,000 Year 1 cash flows Year 2 cash flows INCOME $550,000 EXPENSES $600,000 INCOME $1,100,000 $900,000 $810,000 EXPENSES $400,000 $500,000 5. Determine the internal rate of return. 6. Determine the present value. 7. Determine the recovery period. 8. Define which is the most viable project. $1,000,000 $400,000 The discount rate for the project will be 12%, and investors propose a MARR of 28%. Year 3 cash flows $1500,000 $500,000 $750,000 $600,000

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Below are four cases that you will have to solve using Excel spreadsheets. 3rd Case The company MEGAMAX SA is analyzing two possibilities to expand the market , one of them is to choose to expand the plant to be able to produce a greater number of products, the other option is to diversify production with different new products to take advantage of the facilities that currently owns; The information and projections you have to be able to carry out the analysis to make a decision are the following: PROJECT Initial investment INCOME EXPENSES INCOME Extension $810,000 EXPENSES Diversification $900,000 It is requested: Concept Year 1 cash flows 5. Determine the internal rate of return. 6. Determine the present value. 7. Determine the recovery period. 8. Define which is the most viable project. Year 2 cash flows $1,000,000 $400,000 The discount rate for the project will be 12%, and investors propose a MARR of 28%. $550,000 $600,000 $1,100,000 $900,000 $400,000 $500,000 Year 3 cash flows $1500,000 $500,000 $750,000 $600,000
Transcribed Image Text:Below are four cases that you will have to solve using Excel spreadsheets. 3rd Case The company MEGAMAX SA is analyzing two possibilities to expand the market , one of them is to choose to expand the plant to be able to produce a greater number of products, the other option is to diversify production with different new products to take advantage of the facilities that currently owns; The information and projections you have to be able to carry out the analysis to make a decision are the following: PROJECT Initial investment INCOME EXPENSES INCOME Extension $810,000 EXPENSES Diversification $900,000 It is requested: Concept Year 1 cash flows 5. Determine the internal rate of return. 6. Determine the present value. 7. Determine the recovery period. 8. Define which is the most viable project. Year 2 cash flows $1,000,000 $400,000 The discount rate for the project will be 12%, and investors propose a MARR of 28%. $550,000 $600,000 $1,100,000 $900,000 $400,000 $500,000 Year 3 cash flows $1500,000 $500,000 $750,000 $600,000
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