Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need help with the excel workbook part of this problem. Any insight, tips, or examples is appreciated. Thank you in advance! COS expects capital
I need help with the excel workbook part of this problem. Any insight, tips, or examples is appreciated. Thank you in advance!
COS expects capital projects to have a Payback less than or equal to 3 years. Its target Internal Rate of Return is greater than 16%. Its required return for cash flows is greater than 16%. The company has two projects available for consideration with the following Net Cash Flow projections: Year Project A Project B 0 -$30,000 -$45,000 1 $15,000 $5,000 2 $10,000 $5,000 3 $10,000 $20,000 4 $5,000 $55,000 Your task is to analyze the cash flows and make a recommendation on which project(s) to undertake. COS could take on either Project A, Project B, or both. 1. What is the payback period for each project? Which of the projects would the firm accept based on payback period? You can recommend either one, both or neither one. 2. What is the internal rate of return for each project? Which of the projects would the firm accept based on IRR? 3. What is the NPV for each project? Which of the projects would the firm accept based on NPV? 4. Which of the projects would you recommend that the firm accept? Why (or under what conditions)? Submit a well-documented, professionally explained Excel workbook as well as a professionally written and formatted Word document summarizing your answers to the questions above (where appropriate, you may refer to specifics in your Excel workbook). COS expects capital projects to have a Payback less than or equal to 3 years. Its target Internal Rate of Return is greater than 16%. Its required return for cash flows is greater than 16%. The company has two projects available for consideration with the following Net Cash Flow projections: Year Project A Project B 0 -$30,000 -$45,000 1 $15,000 $5,000 2 $10,000 $5,000 3 $10,000 $20,000 4 $5,000 $55,000 Your task is to analyze the cash flows and make a recommendation on which project(s) to undertake. COS could take on either Project A, Project B, or both. 1. What is the payback period for each project? Which of the projects would the firm accept based on payback period? You can recommend either one, both or neither one. 2. What is the internal rate of return for each project? Which of the projects would the firm accept based on IRR? 3. What is the NPV for each project? Which of the projects would the firm accept based on NPV? 4. Which of the projects would you recommend that the firm accept? Why (or under what conditions)? Submit a well-documented, professionally explained Excel workbook as well as a professionally written and formatted Word document summarizing your answers to the questions above (where appropriate, you may refer to specifics in your Excel workbook)Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started