Question
Build the NPV profile and find IRR for the 2 scenarios (medium and difficult). Use Excel for the calculations and for building a graph. Try
- Build the NPV profile and find IRR for the 2 scenarios (medium and difficult).
- Use Excel for the calculations and for building a graph.
- Try your best to design an optimal solution process.
- Challenge: use NPV and IRR formulas to make sure that you get the same values
- [PLEASE SHOW THE EXCEL SHEETS AND THE GRAPH/PHOTOS ARE OPTIMAL FOR DISPLAY]
NPV Scenario 1:
Medium Example purchasing a new laptop. Lets assume the Apple store sells a laptop for $1,598 today and Adobe Suite for a $30 monthly payment (at the beginning of each month). You are offered to join a company that will pay you $350 per month (at the end of each month) for small Adobe Photoshop work, that you can do fast and easily. The cost of capital is 8% with c.c. What is the NPV for this opportunity? What is the IRR for this opportunity?
NPV Scenario 2:
Difficult Example - AMD needs to fight the shortage of graphic cards and increase production. The company has an opportunity to build a new plant. The project costs $70 million (PV) and will take 1 year. The cost of capital is 6% with c.c. Plant depreciation for the 3 years in operation is 60% total. The expected profit on increased production is $320 per card. The new plant's production capacity is 100,000 graphic cards per year, starting after 1st year and lasting for 3 years. What is the NPV for this project? What is the IRR for this project?
[PLEASE SHARE EXCEL SHEETS AND GRAPH BECAUSE I GENUINELY NEED HELP WITH IT]
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