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Base Case: Texas Tires Auto Shop would like to purchase Max's Motor, another auto repair shop in the neighboring town that is being sold
Base Case: Texas Tires Auto Shop would like to purchase Max's Motor, another auto repair shop in the neighboring town that is being sold for $350,000. Assume cash flows occur at the end of the year. Based on past sales volume, the owner of Texas Tires estimates the net cash flows that will be generated by the shop are as follows: Years Cash Flows 1-3 $60,000 4 65,000 5 75,000 6 80,000 In addition to the cash flows above, after eight years, the owner of Texas Tires can sell the shop for $475,000, if the interest rate on this investment is 9% compounded annually. Required: Based on an analysis of the cash flow information presented, should Texas Tires purchase Max's Motors? Your response should be supported by an thorough analysis of the cash flow activity. What to hand in: Upload one Excel workbook containing your analysis of the cash flows and a brief analysis of whether Texas Tires should purchase Max Motors. All numbers must be formula driven within the cell(s) of the spreadsheet using the Formulas / Insert Function for all calculations. Hard coded numbers will be considered incorrect. This project is testing your understanding of both advanced accounting concepts and your correct use of Microsoft excel. Important: A response with only hardcoded numbers is incorrect and will not receive credit.
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