Evtel Kitchen Appliances wants to investigate new startups in order to form new partnerships with them. Therefore, Evtel hires a research intern, Asl. Asl does some research and finds a startup named Tado that Evtel could be interested in. Tado is a Munich-based smart thermostat and air conditioner developer/manufacturer. Help Asl with her research on Tado. (Assume all payments are made at the end of the year.) Points Part 1 a 5 5 Asl found that Evtel needs to make an initial investment of 16859000 TL. The production will start next year and they plan to sell the factory at the end of year 6. Use the values on Tables A-1 and A-2, and answer the questions of Part 1 accordingly. Report the revenue of the 4th year. Report the net cash flow of the 3rd year. What is the internal rate of return of this investment? b 7 5 d What will happen to IRR if the NPV drops below zero? Click Here 7 Report the amount of money that the business generates above (or below) their expectations in today's terms. 9 f Report the amount of money that the business generates above their expectations in terms of year 2. Part 2 Due to the economic uncertainty, the planning board of Tado decided to sell the store at the end of year 5. This economic situation resulted a reduction for the initial investment. Use the values on Tables B-1 and B-2, and answer the questions of Part 2 accordingly. All the questions are independent.) 10 a Report the selling price that makes the current NPV equal to the one you found in Part 1. 12 b Asl discovers that Tado is only using 80% of its production capacity. She knows a solution that can increase the production capability to 100% without creating new expenses. Report the difference between the new and the old NPV. (Hint: Use the NPV you found in Table A to compare.) (This solution will only increase the revenue from 80% to 100% without changing any other values) Part 3 A student named Chuck has applied for a job in Tado's finance team. But first, he wants to improve his personal finance knowledge. Help him with his calculations. Chuck wants to buy a "BMW M4 Cabrio Competition M xDrive" car which costs 4,939,000 TL. 9 a Chuck puts 300,000 each year into his saving account. If the yearly interest rate of the account is 30%, after how many years can he buy the car? (The car's price remains the same.) (Do not round the answer.) 15 b Chuck knows that the price of the car will increase 11.1% every year. He wants to buy this car after 5 years, since he wants to impress his friends before graduating from college. He decides to invest 300,000TL each year in his savings account. He will ask his father to cover the price difference. How much money does he have to ask in order to buy the car after 5 years? (The yearly interest rate of the savings account is 30%) Deniz wants to launch her own start-up and she started to look for investors. One investor offers her 8361000 TL in convertible debt. It means she can either Part 4 1) pay back the loan over 5 years at a 1.7% monthly interest rate, or 2) give the investor 35% shares in her company. 8 a If Deniz decides to pay the loan back (option 1), what are her monthly payments? 8 8 b q Table A-1 Table A-2 Year Revenue Cost Cash Flow 0 Initial Investment Cost of Capital Yearly Revenue Yearly Expenses Selling Price 16859000,00 25% 650.000 200.000 60.000.000 1 2 3 4 5 6 NPV IRR Table B-1 Table B-2 Year Revenue Cost Cash Flow 0 Initial Investment Cost of Capital Yearly Revenue Yearly Expenses Selling Price 8361000,00 25% 650.000 200.000 60.000.000,00 1 2 3 4 5 NPV IRR Evtel Kitchen Appliances wants to investigate new startups in order to form new partnerships with them. Therefore, Evtel hires a research intern, Asl. Asl does some research and finds a startup named Tado that Evtel could be interested in. Tado is a Munich-based smart thermostat and air conditioner developer/manufacturer. Help Asl with her research on Tado. (Assume all payments are made at the end of the year.) Points Part 1 a 5 5 Asl found that Evtel needs to make an initial investment of 16859000 TL. The production will start next year and they plan to sell the factory at the end of year 6. Use the values on Tables A-1 and A-2, and answer the questions of Part 1 accordingly. Report the revenue of the 4th year. Report the net cash flow of the 3rd year. What is the internal rate of return of this investment? b 7 5 d What will happen to IRR if the NPV drops below zero? Click Here 7 Report the amount of money that the business generates above (or below) their expectations in today's terms. 9 f Report the amount of money that the business generates above their expectations in terms of year 2. Part 2 Due to the economic uncertainty, the planning board of Tado decided to sell the store at the end of year 5. This economic situation resulted a reduction for the initial investment. Use the values on Tables B-1 and B-2, and answer the questions of Part 2 accordingly. All the questions are independent.) 10 a Report the selling price that makes the current NPV equal to the one you found in Part 1. 12 b Asl discovers that Tado is only using 80% of its production capacity. She knows a solution that can increase the production capability to 100% without creating new expenses. Report the difference between the new and the old NPV. (Hint: Use the NPV you found in Table A to compare.) (This solution will only increase the revenue from 80% to 100% without changing any other values) Part 3 A student named Chuck has applied for a job in Tado's finance team. But first, he wants to improve his personal finance knowledge. Help him with his calculations. Chuck wants to buy a "BMW M4 Cabrio Competition M xDrive" car which costs 4,939,000 TL. 9 a Chuck puts 300,000 each year into his saving account. If the yearly interest rate of the account is 30%, after how many years can he buy the car? (The car's price remains the same.) (Do not round the answer.) 15 b Chuck knows that the price of the car will increase 11.1% every year. He wants to buy this car after 5 years, since he wants to impress his friends before graduating from college. He decides to invest 300,000TL each year in his savings account. He will ask his father to cover the price difference. How much money does he have to ask in order to buy the car after 5 years? (The yearly interest rate of the savings account is 30%) Deniz wants to launch her own start-up and she started to look for investors. One investor offers her 8361000 TL in convertible debt. It means she can either Part 4 1) pay back the loan over 5 years at a 1.7% monthly interest rate, or 2) give the investor 35% shares in her company. 8 a If Deniz decides to pay the loan back (option 1), what are her monthly payments? 8 8 b q Table A-1 Table A-2 Year Revenue Cost Cash Flow 0 Initial Investment Cost of Capital Yearly Revenue Yearly Expenses Selling Price 16859000,00 25% 650.000 200.000 60.000.000 1 2 3 4 5 6 NPV IRR Table B-1 Table B-2 Year Revenue Cost Cash Flow 0 Initial Investment Cost of Capital Yearly Revenue Yearly Expenses Selling Price 8361000,00 25% 650.000 200.000 60.000.000,00 1 2 3 4 5 NPV IRR