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You have a chance to invest in a shopping center. The total investment for the purchase of the land and construction of the center is $10,000,000 today. You have calculated the yearly net after tax cash flows from operations as follows: Year 1: $1,500,000 Year 2: 2,000,000 Year 3: 2,250,000 Year 4: 2,500,000 Year 5: 2,750,000 At the end of year 5 you will sell the shopping center for $18,000,000 after taxes. Required: |+ Use the provided Excel spreadsheet to calculate the present value of all the operating after-tax cash flows and the total cash flows for the project assuming you require an 20% R.O.I. Use the attached "PRESENT VALUE TABLE" for your calculations: ATCF PVF NPVATCF YR1 YR2 YR3 YR4 YR5 TOTAL TOTAL CASH FLOWS NATCF FROM OPERATIONS: NATCF FROM SALE OF PROJ: TOTAL NATCF: LESS COST OF PROJECT: NET RETURN: 3333 33333

You have a chance to invest in a shopping center. The total investment for the purchase of the land and construction of the center is $10,000,000 today. You have calculated the yearly net after tax cash flows from operations as follows: Year 1: $1,500,000 Year 2: 2,000,000 Year 3: 2,250,000 Year 4: 2,500,000 Year 5: 2,750,000 At the end of year 5 you will sell the shopping center for $18,000,000 after taxes. Required: |+ Use the provided Excel spreadsheet to calculate the present value of all the operating after-tax cash flows and the total cash flows for the project assuming you require an 20% R.O.I. Use the attached "PRESENT VALUE TABLE" for your calculations: ATCF PVF NPVATCF YR1 YR2 YR3 YR4 YR5 TOTAL TOTAL CASH FLOWS NATCF FROM OPERATIONS: NATCF FROM SALE OF PROJ: TOTAL NATCF: LESS COST OF PROJECT: NET RETURN: 3333 33333

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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You have a chance to invest in a shopping center. The total investment for the purchase of the land and construction of the center is $10,000,000 today. You have calculated the yearly net after tax cash flows from operations as follows: Year 1: $1,500,000 Year 2: 2,000,000 Year 3: 2,250,000 Year 4: 2,500,000 Year 5: 2,750,000 At the end of year 5 you will sell the shopping center for $18,000,000 after taxes. Required: |+ Use the provided Excel spreadsheet to calculate the present value of all the operating after-tax cash flows and the total cash flows for the project assuming you require an 20% R.O.I. Use the attached "PRESENT VALUE TABLE" for your calculations:
Transcribed Image Text:You have a chance to invest in a shopping center. The total investment for the purchase of the land and construction of the center is $10,000,000 today. You have calculated the yearly net after tax cash flows from operations as follows: Year 1: $1,500,000 Year 2: 2,000,000 Year 3: 2,250,000 Year 4: 2,500,000 Year 5: 2,750,000 At the end of year 5 you will sell the shopping center for $18,000,000 after taxes. Required: |+ Use the provided Excel spreadsheet to calculate the present value of all the operating after-tax cash flows and the total cash flows for the project assuming you require an 20% R.O.I. Use the attached "PRESENT VALUE TABLE" for your calculations:
ATCF PVF NPVATCF YR1 YR2 YR3 YR4 YR5 TOTAL TOTAL CASH FLOWS NATCF FROM OPERATIONS: NATCF FROM SALE OF PROJ: TOTAL NATCF: LESS COST OF PROJECT: NET RETURN: 3333 33333
Transcribed Image Text:ATCF PVF NPVATCF YR1 YR2 YR3 YR4 YR5 TOTAL TOTAL CASH FLOWS NATCF FROM OPERATIONS: NATCF FROM SALE OF PROJ: TOTAL NATCF: LESS COST OF PROJECT: NET RETURN: 3333 33333
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