Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

hello everyone, I need help with the below problem: Signature Assignment Parameters the company is Starbucks, download the most recent copy of the company's 10-K

hello everyone,

I need help with the below problem:

Signature Assignment Parameters

the company is Starbucks, download the most recent copy of the company's 10-K report.

The parameters of the deliverable are as follows.

  • The firm is looking to expand its operations by 10% of the firm's net property, plant, and equipment. What is this amount by taking 10% of the property, plant, and equipment figure that appears on the firm's balance sheet.
  • The estimated life of this new property, plant, and equipment will be 12 years. The salvage value of the equipment will be 5% of the property, plant and equipment's cost.
  • The annual EBIT for this new project will be 18% of the project's cost.
  • The company will use the straight-line method to depreciate this equipment. Also assume that there will be no increases in net working capital each year. Use 35% as the tax rate in this project.
  • The hurdle rate for this project will be the WACC that you are able to find on a financial website, such as Gurufocus.com. If you are unable to find the WACC for a company, contact your instructor. He or she will assign you a WACC rate.

I found the step by step explanation however, I need screen shots of how this information is placed into Excel spreadsheets

Step-by-step explanation

Cost of capital ( WACC)= 5.27 % (Need more information of how to get this number, and placed in Excel formula)

Source: https://www.gurufocus.com/term/wacc/NAS:SBUX/WACC-/Starbucks

10K source- https://sec.report/Document/0000829224-19-000051/

Project cost = 6431.7 million x 10% = $ 643 million (Need more information of how to get this number, and placed in Excel formula)

NPV= PV of Cash inflow+ PV of Salvage value - Initial investment (Need more information of how to get this number, and placed in Excel formula)

NPV= 128.81 x PVAF ( 5.27%, 12 years) + 32.15 x PVIF (5.27%, 12 years) - $ 643 million (Need more information of how to get this number, and placed in Excel formula)

= 128.81 x 8.7298 + 32.15 x 0.5400-$ 643 million

= 1124.49 + 17.36 - 643

NPV= $ 498.85 million (Need more information of how to get this number, and placed in Excel formula)

Working

Particular...................... $ (Need more information of how to get this number, and placed in Excel formula)

EBIT.................... .....115.74 (Need more information of how to get this number, and placed in Excel formula)

Less: Tax.................. 40.51 (Need more information of how to get this number, and placed in Excel formula)

EBT...........................75.23 (Need more information of how to get this number, and placed in Excel formula)

Add: Depreciation ...53.58 (Need more information of how to get this number, and placed in Excel formula)

Cash Flow per year.. 128.81 (Need more information of how to get this number, and placed in Excel formula)

All Excel formulas need to be on a separate screen shot so I am able to place on a presentation file.

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

Foundations Of Financial Management

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

11th Canadian Edition

1259024970, 978-1259265921

More Books

Students also viewed these Finance questions