Hi

I need help with task 2 (Plan the cash flow and make an investment plan for the upcoming 20 years.....), you can already see my result for task 1 if you want to know something there, to helping you in task b. You can also read the whole equstion.

In task 2, you can also see an example of how it should look like.

just send me excel or paper you do the task 2 :)

Example of investment plan: A company currently holds SEK 80 000 SEK on their bank account. The yield (interest rate) on the bank account is 0%, but the company use a pre-tax and nominal discount rate of 5% in their Year 0 4 5 6.. investment calculations. Hence the company is interested in investing their liquid assets. Investment in the beginning of the year 60 40 Bank balance after investment (beginning of the year) 20 27 34 13 25 There are five investment alternatives available (all amounts below in SEK and thousands): Revenue minus Cost during the year 12 12 Project A Cash available at the end of the year 80 25 Basic investment at start: 70 Net cash flow (read end of year) -60 -33 12 o Revenues year 1-7: 30 PV Net cash flow -60 6.6 6.3 -28.5 9.9 9.4 o Costs year 1-5: 10 Net Present Value of the company's cash flows: -60+6.6+6.3-28.5+9.9+9.4+9... = ? o Costs year 6-7: 20 al Investment in project D, beginning of year 1 o Residual value at the end of the project (end of year 7): 10 bl Investment in project B, beginning of year 4 . Project B o Basic investment at start: 40 Cash is not always available when needed the most. o Revenues year 1-15:5 Project C To increase the investment opportunities the company will from now on be able to issue a 10y o Basic investment at start: 90 corporate bond that amounts to SEK 120 000 and yields 7.5% for the bond investor. (The company o Revenues year 1-7: 30 can in other words borrow SEK 120 000 during 10 years from a bond investor. After the end of the o Costs year 1-7: 15 lending period the loan is repaid in full). It can comparably be considered as another project: Project D Project F o Basic investment at start: 60 o Basic investment at start: -120 o Revenues year 1-12:7 o Costs year 1-10:9 Project E o o Basic investment at start: 160 Residual value at the end of the project (end of year 10): -120 Revenues year 1-8: 40 Costs year 1-4:5 o Costs year 5-8: 10 o Residual value at the end of the project (end of year 8): 30 Assume that each project can only be done once, however, they are all available during an investment planning horizon of 20 years ahead. 1) Finish the calculations, present them, and present the results for each project accordingly: Project A Project B Project C Project D Project E a. Net Present Value (NPV) 38,265 11.90 -3-20 2.0 72 b. Net present value ratio 0.54 0.30 -0.0355 0.033 0.45 c. Annuity (a) 6.61 1.156 -0.522 0,23 11,139 d. Internal Rate of Return (IRR) 19% 9% 4% 6% 15% * Net present value ratio = NPV Basic Investment Ok, now you have some indicators on how to prioritize your cash while investing in the projects. Since you have a limited starting capital, you need to figure out which project(s) to begin with, and also consider each projects annual contribution to the available cash at the bank account. 2) Plan the cash flow and make an investment plan for the upcoming 20 years in which you maximize the Net Present Value of the company's cash flows. Cash flows that occurs after 20 years will not be considered and it is important that the balance at the company's bank account never goes below zero