Jefferson Company is a merchandiser located in western North Carolina. You serve on the companys capital budgeting review committee whose purpose is to evaluate all capital investment proposals and then provide an accept or reject recommendation to the CEO. Recently, your committee provided a reject recommendation on a specific proposal based on the following net present value analysis (NPV):

The group of employees that submitted this request is disappointed that you provided a reject recommendation for its proposal. The group does not understand why working capital is treated as a $100,000 cash outflow now and a $100,000 cash inflow at the end of the project. To explain your accounting for working capital in the NPV analysis shown above, you decide to proceed in two steps. First, you will explain how to calculate the annual opportunity costs that arise from tying up $100,000 of working capital for four years. Second, you will create a data visualization that summarizes these calculations. Download the Excel file, which you will use to create the Tableau visualization that aid your explanation. Upload the Excel file into Tableau by doing the following:

1. Open the Tableau Desktop application.
2. On the left-hand side, under the Connect header and the To a file sub-header, click on Microsoft Excel.
3. Choose the Excel file and click Open.
4. Since the only worksheet in the Excel File is Calloway Company it will default as a selection with no further import steps needed

Download the Excel file that you will use to create a Tableau visualization that summarizes the annual opportunity costs calculated in Part 1. Upload the Excel file into Tableau by doing the following: 5. Open the Tableau Desktop application. 6. On the left-hand side, under the Connect header and the To a file sub-header, click on Microsoft Excel. 7. Choose the Excel file and click Open. 8. Since the only worksheet in the Excel File is Jefferson Company it will default as a selection with no further import steps needed

• Double click on new sheet at the bottom of the workbook and change the name of the newly created Sheet 1 to Working Capital.
• On the left-hand side under Dimensions (sometimes labeled as Tables), double-click on Year.
  • Click on Future Value in the resulting table and drag it down to the bottom of the table causing the table from top to bottom to look as follows:

  • Working Capital
    Year
    Present Value	Abc
    Year 1	Abc
    Year 2	Abc
    Year 3	Abc
    Year 4	Abc
    Future Value	Abc

• On the left-hand side under Measures, double click on Amount.
• In the upper right-hand corner, click on Show Me and choose the Horizontal bars option in the 1st column third row down.
• Next click on the button to swap the rows and columns () above the Columns area
• On the left-hand side under Dimensions (sometimes labeled as Tables), double-click on Description.
• Click on the drop down in the green pill SUM(Amount) in rows and choose Quick Table Calculation then choose Running Total.
• In the Marks area, click on the dropdown that currently says Automatic and choose Gantt Bar.
• Create a new calculated measure that represents the negative of the Amount Value
  • Begin by creating a new calculated field.
    • Click on Analysis from the menu dropdowns at the top and choose Create a calculated field.
      • Replace the current calculated field name Calculation1 with - Amount
      • Type in the following formula:
        • -[Amount]
• Click on the newly created -Amount and drag and drop it onto the Size marks card ().
• On the left-hand side under Dimensions (sometimes labeled as Tables), click on Description and drag and drop it onto the Colors Marks card ().
• On the left-hand side under Measures, click on -Amount and drag and drop it onto the Label Marks card ().
• To improve viewing, locate the Standard dropdown option in the menu bar at the top of the screen. Click on that dropdown and choose Entire View.
• Your visualization should appear as follows:

Required: (Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) 2a. The total amount of the opportunity cost associated with tying up working capital for the four-year life of this project (discounted to its present value) is:

check all that apply 1

• $100,000
• $48,225
• $80,000
• $51,775

2b. Which of the following statements best describes why the opportunity in year 1 is greater than the opportunity cost in year 4?

check all that apply 2

• The time value of money recognizes that a dollar received one year from now is worth more than a dollar received four year years from now.
• The time value of money recognizes that a dollar received one year from now is worth less than a dollar received four year years from now.
• The time value of money recognizes that a dollar received one year from now is worth the same as a dollar received four year years from now.
• Ignoring the time value of money creates a higher opportunity cost in year 1 compared to year 4.

2c. If the companys opportunity cost of capital was 18% instead of 20%, then which of the following statements would be true?

check all that apply 3

• The total amount of the opportunity cost associated with tying up working capital for the four-year life of this project (discounted to its present value) would decrease.
• The total amount of the opportunity cost associated with tying up working capital for the four-year life of this project (discounted to its present value) would increase.
• The total amount of the opportunity cost associated with tying up working capital for the four-year life of this project (discounted to its present value) would hold constant.
• The total amount of the opportunity cost associated with tying up working capital for the four-year life of this project (discounted to its present value) would decrease for the first two years and then increase for the last two years.

A 1 Year 2 Present Value 3 Year 1 4 Year 2 5 Year 3 6 Year 4 7 Future Value 8 Amount Description $ 100,000.00 Present Value $ (16,667.00) Annual Opportunity Cost $ (13,889.00) Annual Opportunity Cost $ (11,574.00) Annual Opportunity Cost $ (9,645.00) Annual Opportunity Cost $ (48,225.00) Future Value