The finance team is looking at some various CD and savings options to create a sinking fund to pay for a planned facility expansion. They are going to need $175,000 at the end of month 3, $160,000 at the end of month 4 and $120,000 at the end of month 6. Marinette has been working with 2 local banks; the following table outlines their current return on various investments. (Blanks note that that option is not available at that bank.) Return Term (months) Bank 1 Bank 2 1 0.82% 0.88% 2 1.81% 1.93% 3 2.53% 4 3.81% 3.84% 5 5.46% 6 6.42% 7.05% The 1-month investments noted in the table above each have a setup fee, Bank 1 has a $400 fee per investment, Bank 2 charges $600. This fee is charged at the beginning of each investment. Create an Excel model to determine the optimum solution to meet the required payments.
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- Your financial advisor from Bluerock recommends you to invest in one of the plan. You want to compare and verify which of the following is the best investment option. Investment Plan A: Deposit $125,000 at the beginning and obtain $175,318.97 after 5 years.Investment Plan B: Deposit $243,000 at the beginning and obtain $319,771.42 after 7 years.Investment Plan C: Deposit $314,000 at the beginning and obtain $530,496.39 after 9 years. 1. Compute interest rate for all 3 plans. Which investment plan provides you the highest rate? 2. Your advisor updated the investment plan information yesterday. While the interest rate did not change for all 3 plans, future values of each investment are 210382.76, 415702.85, 742694.95, respectively. What would be the investment period for each plan? 3. Your advisor thinks it would be a good investment if you make an investment portfolio using all 3 investment plans suggested. He recommends investing in all 3 plans at year 0 and reinvest the money to…Assume you are the finance manager of Almanor Company, and the company is considering investing in one of the three projects. The life for both the Projects X, M and Project Y is 5 years. Project X costs OMR. 20500, Project M costs OMR. 20500 and Project Y costs OMR.20500. The discount rate/cost of capital is 4.15%. Required: Use the following techniques to help company to decide which Machine is better and justify why? a) Payback period b) Discount payback period c) Net Present Value d) Present value index -Profitability index. Year Project X Project M Project Y 7865 3748 8752 4567 7609 8393 3. 9676 4628 4508 7292 8905 7836 9904 0066 8287 (Ctrl) - 45X-treme Vitamin Company is considering two investments, both of which cost $34,000. The cash flows are as follows: $ 36,000 Project B $ 34,000 16,000 18,000 16,000 10,000 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a-1. Calculate the payback period for Project A and Project B. Note: Round your answers to 2 decimal places. Year Project A 1 2 3 Project A Project B a-2. Which of the two projects should be chosen based on the payback method? Project A O Project B Payback Period year(s) year(s) b-1. Calculate the net present value for Project A and Project B. Assume a cost of capital of 12 percent. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Project A Project B Net Present Value
- After analysing the financial data of Q-Constructions, you notice that they are trending in the right direction. A new 12-month construction proposal has come to the company worth $1,000,000 and an important question is whether it will be financially viable. They want you to analyse the proposal, in particular, the recommended cash flow schedule and to understand the key financial points during the construction project. The following cash flow schedule is summarised below. To ensure that all upfront and on-going outlay costs are covered in advance, Q-Constructions incur an initial start-up cost of $200,000. The proposal states that they will receive a deposit from the client of 10% of the total project price at the beginning. They then receive four equal instalment payments of 20% of the total project price associated to project milestones from the client at the end of the 2nd, 6th, 8th and 10th month. Finally, they receive the last 10% project milestone on lock-up which occurs at the…After analysing the financial data of Q-Constructions, you notice that they are trending in the right direction. A new 12-month construction proposal has come to the company worth $1,000,000 and an important question is whether it will be financially viable. They want you to analyse the proposal, in particular, the recommended cash flow schedule and to understand the key financial points during the construction project. The following cash flow schedule is summarised below. To ensure that all upfront and on-going outlay costs are covered in advance, Q-Constructions incur an initial start-up cost of $200,000. The proposal states that they will receive a deposit from the client of 10% of the total project price at the beginning. They then receive four equal instalment payments of 20% of the total project price associated to project milestones from the client at the end of the 2nd, 6th, 8th and 10th month. Finally, they receive the last 10% project milestone on lock-up which occurs at the…After analysing the financial data of Q-Constructions, you notice that they are trending in the right direction. A new 12-month construction proposal has come to the company worth $1,000,000 and an important question is whether it will be financially viable. They want you to analyse the proposal, in particular, the recommended cash flow schedule and to understand the key financial points during the construction project. The following cash flow schedule is summarised below. To ensure that all upfront and on-going outlay costs are covered in advance, Q-Constructions incur an initial start-up cost of $200,000. The proposal states that they will receive a deposit from the client of 10% of the total project cost at the beginning. They then receive four equal instalment payments of 20% of the total project cost associated to project milestones from the client at the end of the 2nd, 6th, 8th and 10th month. Finally, they receive the last 10% project milestone on lock-up which occurs at the…
- X-treme Vitamin Company is considering two investments, both of which cost $20,000. The cash flows are as follows: Year Project A Project B 1 $ 23,000 $ 20,000 2 10,000 9,000 3 10,000 15,000 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a-1. Calculate the payback period for Project A and Project B. (Round your answers to 2 decimal places.) project A 0.87 years project B 1 year b-1. Calculate the net present value for Project A and Project B. Assume a cost of capital of 8 percent. (Do not round intermediate calculations and round your final answers to 2 decimal places.)Please use the images attached to answer the following:Determine the weighted average cost of capital (WACC) for VigourPharmaceuticals.What is the excel function and formula for this question? Off-The-Books Investment Firm, LLC, has offered you an investment it says will return to you $20,000 in 2 years. To get in, you'll need to make a $10,000 deposit to their receivables account and promise not to tell anyone about it. What is the annual return on this investment?
- X-treme Vitamin Company is considering two Investments, both of which cost $14,000. The cash flows are as follows: Tear Project A Project B $16,000 $14,000 5,000 9,000 2 3 6.000 4,000 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a-1. Calculate the payback period for Project A and Project B. (Round your answers to 2 decimal places.) Project A Project B Payback Period year(s) year(s) a-2. Which of the two projects should be chosen based on the payback method? O Project A O Project B b-1. Calculate the net present value for Project A and Project B. Assume a cost of capital of 8 percent. (Do not round intermediate calculations and round your final answers to 2 decimal places.) Project A Project B Net Present ValueYou are asked to evaluate the following two projects for the Norton corporation. Use a discount rate of 13 percent. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Project X (Videotapesof the Weather Report)($28,000 Investment) Project Y (Slow-MotionReplays of Commercials)($48,000 Investment) Year Cash Flow Year Cash Flow 1 $ 14,000 1 $ 24,000 2 12,000 2 17,000 3 13,000 3 18,000 4 12,600 4 20,000 a. Calculate the profitability index for project X. (Do not round intermediate calculations and round your answer to 2 decimal places.) b. Calculate the profitability index for project Y. (Do not round intermediate calculations and round your answer to 2 decimal places.) c. Which project would you select based on the profitability index? multiple choice Project X Project YUse Excel to solve the following problem. Assume that as a local government financial analyst you are asked to project the feasibility of a loan to a proposed public service venture for its start-up funding. The venture’s principals estimate that, at the end of 5 years, they will be able to pay back up to $800,000 from revenues accruing to the venture’s activities. Assuming that your organization’s current “average cost of capital” is 4.8% (the “discount rate”). Assuming monthly compounding, what is the maximum amount your government can commit to the venture for its start-up? (I have worked this problem out on my own, I just want to be sure I used the correct formulas.)