Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Use the project data given below to build a spreadsheet to:
1. find out the cash flows for all years of this project.
2. find out the WACC for this project.
3. find out the NPV and IRR for this project.
4. Use an IF statement to generate a decision for this project in a worksheet other than the worksheet that find outs the project's cash flows.

Rye Baking Company is considering replacing its manual bread mixing and baking process with a new mixing and baking machine for its specialty breads. The proposed new machine has a purchase price of $340,200 and a cost of $4,000 to ship and install. This cost will be depreciated straight-line to zero over the project's 5-year tax life. The project life of the mixing/baking system for the bakery, however, is 4 years, at the end of which the mixing system is expected to be scrapped for $65,500.

The new mixing and baking system is expected to make a better quality product and the bakery expects to see sales increase by $107,200 per year. The bakery does not expect the new machine to make any change in total operating costs. The proposed new system requires an initial investment in a net working capital of $48,200. The company's tax rate is 34 percent.

The company wants to maintain a 0.36 debt to equity ratio. The YTM on the company's existing bonds is 5.9 percent. The company's stock is selling for $78.00 per share and it just paid a dividend of $2.30 per share. Dividends are expected to grow at an average constant rate of 4.2 percent per year.

Note: The NPV function in Excel is not correctly programmed to find out NPV as the term is used in finance. The Excel NPV function find outs only the PV of the future cash flows and does not include the initial outlay in its formulation. Adjust your spreadsheet formulation to reflect this programming error. Double check the spreadsheet results with the calculator to be sure spreadsheet results are correct.

The spreadsheet must include:
- At least two worksheets - with at least one worksheet for inputs and summary of output (results).
- At least 2 different types of number format.
- At least 2 different colors for cell highlighting.
- All calculations must be done within the spreadsheet.
- All formulated cell calculations must use cell references (the number inputs must be first listed or input in another cell).
- Use at least one IF statement to automatically generate a project accept/reject decision.
- Use at least 2 built-in formulas or functions (fx),other than =IF (e.g., =sum(D3:F3), =NPV(rate,A3:A9), etc.).
- Include at least 1 cell with a defined name (see the name manager under the formula tab).

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M926002

Have any Question? 


Related Questions in Basic Finance

A firm that produces light bulbs claims that their

A firm that produces light bulbs claims that their lightbulbs last 1500 hours, on average. You wonder if the average might differ from the 1500 hours that the firm claims. To explore this possibility you take a random sa ...

Due to recent bad press a major healthcare company has

Due to recent bad press, a major healthcare company has experienced a market reevaluation. The firm has a $1,000 bond issue outstanding with 15 years to maturity and a coupon rate of 8%, with interest paid semiannually. ...

In a survey of 2695 adults 1479 say they have started

In a survey of 2695 adults, 1479 say they have started paying bills online in the last year. Construct a 99% confidence interval for the population proportion. Interpret the results. A 99% confidence interval for the pop ...

1 what is the difference between a stratum and a cluster2

1. What is the difference between a stratum and a cluster? 2. What is the drawback of obtaining random samples by telephone? 3. In what way would the use of sampling improve the accuracy of the United States census?

1 what are the total assets and net income available to

1. What are the total assets and net income available to common shareholders for McDonald's Corp. (ticker: MCD:US) at the end of each of the last five fiscal years? Read this information from the annual financial stateme ...

Discussion questionliabilities please respond to the

Discussion Question "Liabilities" Please respond to the following: • Let's use this discussion to study bonds together. Assume the following information for a bond issue: ABC Company issues the bonds at a face value of $ ...

Name the two ways in which joints loaded in shear resist

Name the two ways in which joints loaded in shear resist loads ? Which kind is slip-critical? Which kind requires control of bolt preload during assembly? What are typical coefficients of friction for slip-critical joint ...

1 compare the assessment of face content and construct

1. Compare the assessment of face, content, and construct validity. Which of the three approaches is most objective, and why? Is it possible to have a measure that is construct valid but not face valid? 2. What is the im ...

The potential revenues of all projects are in fact

The potential revenues of all projects are in fact uncertain. The company determines that the revenue for project 1 is following a uniform distribution ranging from $1,200,000 to $2,000,000. The revenue for project 2 is ...

1 deriving from the conclusion of proposition i what is the

1. Deriving from the conclusion of Proposition I, what is the crux of M&M Proposition II? What is the natural relationship between the required returns on debt and on equity that results from Proposition II? 2. In what w ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen