Assignment: 1. Listen to the following videos and then complete the assignments using the changed numbers on the guidance report. Place your answers on the guidance report.
2. Open the Guidance Report and rework the problem with the changed numbers and place your answers on the guidance report. Do not alter the guidance report.
3. Submit the guidance report using the Assignment Submission tab below. ANSWERS ARE BASED ON START DATE.. MY START DATE IS JANUARY
Complete the following problems and exercises:
• Chapter Eight Exercise 1
• Chapter Eight Exercise 3
• Chapter Eight Problem 3
• Chapter Eight Problem 4
Ch 8 Ex 1:
Questions: 1. Single cash flow: Calculate single cash flow using NPV function. (Note: Use Excel NPV, enter rate and use a column with a zero amount for years 1-4(row 1-4)and 12000 entered in year 5(row 5)
2. Annual receipt: Find annual receipt using excel PV function. (Note: Use Excel PV function.)
3. Single receipt: Calculate single receipt using NPV function. (Note: use NPV and same approch as above.)
4. Annual receipt: Compute annual receipt using excel NPV function. (Note: use NPV and same approch as above.)
Ch 8 Ex 3: 1. Compute the net present value of the proposed investment.
2. Considering the time value of money , should Contempo acquire the new equipment? Why?
Ch 8, Pb 3: 1. Compute the total revenue.
Revenue per year-class 1
Revenue per year-class 2
Total revenue
2. Calculate the total yearly expenses.
Total yearly expenses (Added extra costs per game minus depreciation) X (# of games)
3. Find the net present value using given information.
Cash flow year 1(Inflows- expenses)
Cash flow year 2
Cash flow year 3
Cash flow year 4
Net Present value
4. Compute NPV using present value of residual.
Present value of residual:
Year 1
Year 2
Year 3
Year 4
NPV
5. Computing the net present value.
Total Present value Calculation:
NPV Cash Inflows
NPV of residual:
Cost of Arena
Total Net Present Value
In addition to the cash flows presented here, what other cash flows might change if the Eskimos add on to the arena?
Ch 8, Pb 4: 1. Calcualte the net present value of costs.
Keep Equipment:
Year 1 costs
Year 2 cost
Year 3 costs
Year 4 costs
Year 5 costs
Year 6 costs
Net Present Value of costs
Note: Disregard the sale amount, that will be used if we buy new equipment. Instead treat the residual value as the final cash inflow.
2. Calcualte the net present value of costs.
Buy Equipment:
Year 1 costs
Year 2 costs
Year 3 costs
Year 4 costs
Year 5 costs
Year 6 costs
Net Present Value of costs
Add purchase amount
Add sale amount
Net Present Value of costs
Note: The yearly costs are added and are a negative cash flow. The cost of the new machine is also negative and the sale of the equipment is positive. Both the purchase and sale are treated as cash flows as of today.
Columbia's management believes that the time value of money should be considered in all long-term decisions. Briefly discuss the rationale that underlies management's belief.
Information related to above question is enclosed below:
Attachment:- ACC206WeekFiveGuidanceReport.rar