Excel Analytics 14-1 (Algo) Internal Rate of Return [LO14-2, LO14-3] Sacco Company has an opportunity to manufacture and sell a new product for a five-year period. The company estimated the following costs and revenues for the new product Goal Seek is a tool within Microsoft Excel that performs a "what-if analysis" that enables you to learn what input values would be needed to achieve a desired goal or outcome. When utilizing Goal Seek you should proceed as follows: 1. Under the "Data" tab click on the "What If Analvsis" dron down in the "Forecast" section Annual revenues and costs: 2. From that drop down select. Workbook last saved: 2h ago 3. A "Goal Seek" option box will appear with three values to be manipulated a. The first input is "Set cell" which is the with a formulaic output that you want to change to a specific outcome. Here you will select the specified outcome cell or type in the cell value manually. When the project concludes in five years the working capital will be released for investment elsewhere in the company. b. The second input is "To value" which is the desired goal or outcome that you want the cell you selected in Cllck here to download the Excel template, which you will use to answer the questions that follow. the first input to be changed to. For example, if you want to break even, you could set this value to 0 or if you wanted profit of $5,000 you could input 5000 . c. The third and final input is "By changing cell" is the cell that contains the variable you want to change that is linked to the formulaic output cell that was chosen in the "Set cell" input Excel Analytics 14-1 (Algo) Part 1 4. Click OK Required: 5. Now the "Set cell" should have been modilied to the "To value" you chose as well as the cell value that you 1. One method for computing the internal rate of return relles on computing the factor of the Intemal rate of return as shown below. designated as the "By changing cell" variable. Factor of the internal rate =AnnualnetcashinflowInvestnentrequired of return Can this equation be used to calculate the Internal rate of return for Sacco Company? Why? Complete this question by entering your answers in the tabs below. Which of the following statements is true with respect to this equation? Oit can be used to ealculate the internal rate of return in this instance because the net cash inflows are the same every year. Oit cannot be used to calculate the internal rate of return in this instance because the net cash inflows are
