Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Eulman, lic. Is considering a new project and has provided the detalls of the project. The Controller has asked you to compute various capital pudgeting

image text in transcribed
image text in transcribed
image text in transcribed
Eulman, lic. Is considering a new project and has provided the detalls of the project. The Controller has asked you to compute various capital pudgeting methods to help aid in the decision to pursue the investment. Use the information included in the Excel Simulation and the Excel iunctions described below to complete the task. - Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, if in a blank cell, "IC4" was entered, the formula would output the result from cell C4, or 225,000,000 in this example. - Basic Math functions: Allows you to use the bosic math symbols to perform mathematical functions. You can use the following keys: +. (plus sign to odd), - (minus sign to subtract). "(asterisk sign to multiply), and/ (forward siash to divide). From the Excel Simulation below, if in a blank cell "D13+D14" was entered, the formula would add the values from those cells and output the result, or 1,150.000 in this example. If using the other math symbols the result would output an appropriate answer for its function. - Sum function: Allows you to refer to multiple cells and adds all the values. You can add individual cell references or ranges to utilize this function. From the Excel Simulation below, If in o blank cell "=SUM(D7,D8,09)" was entered, the formulo would output the result of adding those three separate cells, or 5,500,000 in this example. Similarly, if in a blank cell "-5UM(D7.09)" was entered, the formula would output the same result of adding those cells, except they are expressed as a range in the formulo, and the result would be 5,500,000 in this example. - RaTE function: Allows you to return the interest rate por period. The syntax of the RATE function is "-RATE(npecomt (IMlitypel(guess) and results in the pereentage interest rate value for the reioted inputs. The nper argument is the total number of poyment periods. The pmt argument is the payment made each period that does not change over the life of the investment and this argument must be included if the (IV) argument is not included. The pv orgument is the present value, or the total amount that series of future payments is worth now. The [ M largument is the future value, of the cash basis to attain after the last poyment is made at d this argument must be included if the pmit argument is omitted. The [type] argument is a logical value of 0 or 1 , which indicates when the payments are due where 1 is the poyment of the beginning of the period and 0, is the payment at the end of the period. Both the (if) and (lype/values are optional arguments to have the formula work, which is why they are surrounded by brackets in the syntax, however, these values would not be entered with brackets in the actual function. The (guess) argument is also optional and is your guess for what the rate will be, however, if omitted the system assumes a guess of 10 percent. For the purposes of this Exce. Simulation. please include both the (omitland/ / CVlarguments, but leave. out the. ilypeland lovesslarguments from the function. Also, the pvargument. should be entered as negative value - PV Function: Allows you to perform the mathematical present value calculation of a value. The syntax of the PV function is "PV(rate, nper.pmLifulfype)" and results in the total amount that a series of future payments is worth now also known as the present value. The rate argument is the interest rate per period. The nper argument is the total number of payment periods. The pmt argument is the payment made each period that does not change over the life of the investment and this argument must be included if the (IN) argument is not included. The [ ( V argument is the future value, or the cash basis to attain after the last payment is made and this argurnent must be included if the pmt argument is omitted. The (Cype) argument is a logical value of 0 or 1 , which indicates when the poyments are due where 1 . is the payment at the beginning of the period and 0 , is the payment ot the end of the period. Both the (if) and (type/values are optional arguments to have the formula work, which is why they are surrounded by brackets in the syntox, however, these values would not be entered with brackets in the actual function. For the purposes of this. Excel Simulation. Dlease include both the famtlang / liv/arguments, but A1 f. Laurman, Inc. is considering the following project: 29 Present value of the cash flows 30 Net present value Use Excel's PV function to compute the present value of the future cash flows 33 Deduct the cost of the investment 34 Net present value 3. Use Excel's RATE function to compute the project's internal rate of return 4. Compute the project's payback period. years 5. Compute the project's simple rate of return. 41 42 43 14 REAOY Attempt(s)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Front Office Operations And Auditing Workbook

Authors: Patrick J. Moreo, Gail Sammons, Jeff Beck

2nd Edition

0130324930, 978-0130324931

More Books

Students also viewed these Accounting questions

Question

8-6 Who poses the biggest security threat: insiders or outsiders?

Answered: 1 week ago