Exercise You work as a production manager in a construction company and your task is to clarify the profitability conditions of the investment to your supervisor. The investment target is a new enterprise resource planning system. You estimate its retention period to be 5 years. The company's interest rate is 10%. You have determined the costs and benefits of the investment below. The investment has no residual value. a) Prepare a cash flow statement b) Calculate the present value of the investment. c) What is the internal interest rate of the investment? d) What is the interest-bearing repayment period of the investment day e) Is the investment profitable? Justify. Use Excel formulas and functions in invoices. Investment equipment €1,000,000 software €300,000 -cabling €10,000 furnishings €25,000 Annual costs personnel costs €280,000 training €20,000 related material €20,000 Annual returns reduction of losses by €300,000 reduction of inventories by €150,000 personnel costs €360,000
Exercise You work as a production manager in a construction company and your task is to clarify the profitability conditions of the investment to your supervisor. The investment target is a new enterprise resource planning system. You estimate its retention period to be 5 years. The company's interest rate is 10%. You have determined the costs and benefits of the investment below. The investment has no residual value. a) Prepare a cash flow statement b) Calculate the present value of the investment. c) What is the internal interest rate of the investment? d) What is the interest-bearing repayment period of the investment day e) Is the investment profitable? Justify. Use Excel formulas and functions in invoices. Investment equipment €1,000,000 software €300,000 -cabling €10,000 furnishings €25,000 Annual costs personnel costs €280,000 training €20,000 related material €20,000 Annual returns reduction of losses by €300,000 reduction of inventories by €150,000 personnel costs €360,000
Chapter2: Loads On Structures
Section: Chapter Questions
Problem 1P
Related questions
Question
Calculate the task according to the instructions. Show formulas in Excel for each point. Put pictures of the formulas or attach an excel file with solutions.
Transcribed Image Text:Exercise
You work as a production manager in a construction company and your task is to clarify the profitability conditions of the investment to your supervisor. The
investment target is a new enterprise resource planning system. You estimate its retention period to be 5 years. The company's interest rate is 10%. You
have determined the costs and benefits of the investment below. The investment has no residual value.
a) Prepare a cash flow statement
b) Calculate the present value of the investment.
c) What is the internal interest rate of the investment?
d) What is the interest-bearing repayment period of the investment day
e) Is the investment profitable? Justify.
Use Excel formulas and functions in invoices.
Investment
equipment €1,000,000
software €300,000
-cabling €10,000
furnishings €25,000
Annual costs
personnel costs €280,000
training €20,000
related material €20,000
Annual returns
reduction of losses by €300,000
reduction of inventories by €150,000
personnel costs €360,000
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