Question
Determining the viability of a long-term capital investment is a fundamental aspect of corporate accounting. In this assignment, you use Excel to make and interpret
Determining the viability of a long-term capital investment is a fundamental aspect of corporate accounting. In this assignment, you use Excel to make and interpret specified calculations for a capital investment analysis that includes sensitivity and what-if analyses for a proposed football training facility.
Instructions
- Read the following scenario and use the Week 4 Assignment Template [XLSX] to complete this assignment.
- Specific directions are included in the template. Make sure to complete all tabs for Parts 1 and 2 and follow the directions given in each.
- Note that you must add functionality to the appropriate spreadsheets to make the proper calculations.
Scenario
Use the following to scenario for your work:
Kicking It Corp. is planning to open a football camp in Arizona, which will require a land purchase and facilities development that includes fields, sleeping and dining facilities, maintenance equipment and other capital expenditures. Each year, the camp will run for eight one-week sessions. The company will also incur operational expenses.
The estimates in the following table have been shared with company leadership and investors:
Item | Amount |
Land | $300,000 |
Facilities | $600,000 |
Annual Cash Flow (150 total yearly players' fees) | $920,000 |
Annual Cash Outflows | $840,000 |
Estimated Useful Life of Facilities | 20 years |
Facilities Salvage Value | $1,500,000 |
Discount Rate | 8% |
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