Question
I need assistance for an accounting class. Excel spreadsheet formulas are not working right. I keep getting error messages when using the functions for the
I need assistance for an accounting class. Excel spreadsheet formulas are not working right. I keep getting error messages when using the functions for the problem below. I used online calculators specifically for accounting/ finance and get answers I"m not getting on Excel. Not sure if there is a glitch with Excel on my laptop or I'm not entering numbers right. I'd like some help.
The problem:
ABC Company wants to expand internationally. It sells 25% of all the toaster ovens sold in the United States but only 3% of the toaster ovens sold outside of the United States. The organization believes that it can sell more of its product if it has a production facility located overseas. Estimates concerning two possible locations: Mexico City, Mexico or Salvador, Brazil. The data is as follows:
Mexico City Salvador
Initial cash outlay: $3,500,000 $3,000,000
Useful life: 20 years 20 years
Net cash inflows excluding depreciation : $750,000 $830,000
The cost of capital: 9% 9%
Tax rate: 40% 40%
With this information I need to calculate: Accounting rate of return on investment (ROI), Payback, Net present value, Internal rate of return. I need to get this information onto a spreadsheet, but like I said I'm having issues with Excel, which isn't normal. Can someone please give advice on the correct ways to callulate this, the correct Excel functions to use, etc. I'd like to verify the numbers I do have. This is my first accounting class so any advice you can offer is very much appreciated.
Thank you!
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