Assignemnt: New Investment Analysis

Project Description:

Flanky's, a small manufacturer of custom clothing for dogs and cats, is considering the purchase of a new building as part of its long-term strategic plan. You have been asked to conduct an analysis on the loan as well as an investment analysis using the NPV function based on an estimated series of cash flows generated by the new building and a required rate of return of 18%.

Instructions

1 Start Excel. Open the file named e06ws11_grader_a1.xlsx. Save the file with the name e06ws11Building_LastFirst, replacing LastFirst with your name.

2 On the BuildingAnalysis worksheet, in cell C5, calculate the amount to finance by subtracting the starting capital from the purchase price of the building.

3 In cell C10 calculate the end of period quarterly payment amount using the PMT function. Be sure the result is displayed as a positive number.

4 In cell C11 calculate the total cumulative interest that will be paid on the loan for all 28 end-of-the-period quarterly payments. Format as Currency. Be sure the result is displayed as a positive number.

5 In cell C13 calculate the total cost of the loan by adding the amount financed to the total cumulative interest.

6 In cell F13, calculate the net present value of the investment using the NPV function. Format as Currency with 2 decimal places, if necessary.

7 In cell I7 calculate the straight-line depreciation value of the building for year one and copy the formula down through year 7.

8 In cells J7:J13, calculate the accumulated depreciation amount for each year.

9 In cells K7:K13, calculate the book value of the asset at the end of each year of its useful life.

10 In cell I17, calculate the declining-balance depreciation value of the building for year one and copy the formula down through year 7.

11 In cells J17:J23, calculate the accumulated depreciation amount for each year.

12 In cells K17:K23, calculate the book value of the asset at the end of each year of its useful life.

13 Select cells I23:K23, click the Border arrow in the Font group, and then click Thick Bottom Border.

14 Ensure that the workbook contains the following worksheets (in this order): BuildingAnalysis, Documentation. Click Save, close Excel, and then submit the file as directed by your instructor.

Attachment:- mosken_e06ws11_grader_a1.xlsx