Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PLEASE ATTACH EXCEL FILE!!! Scenario for Homework #1 . Let's say that a company has purchased a plot of land (approximately 15 acres) in an

PLEASE ATTACH EXCEL FILE!!! image text in transcribed
image text in transcribed
Scenario for Homework #1 . Let's say that a company has purchased a plot of land (approximately 15 acres) in an affluent suburb. They must now decide what to build on that land. The three options they are considering are listed in the table below along with the forecasted cash flows for each option. Complete the decision matrix on the next slide to determine which would be the best option (choose only one). Write a sentence or two explaining your answer and why you selected that project. Hint: Use Excel to do your calculations of NPV and PP. Turn in your Excel file with explanation to the drop-box for HW #1. (20 points) Cash Flows ($000) Initial Outlay Net Inflows per year Number of Years of inflows Apartment Building (100 units) $750 +$100 20 Office Park (40 8-room offices) $360 +$60 2 0 Shopping Center (8 stores) -$500 +$125 20 The Scoring Method (aka Decision Matrix) method Use 6% discount rate for NPV. Use Excel to calculate NPV and PP. For ratings on NPV, use NPV/100 (Example: if NPV = $550, use 5.5 for the rating on that project) For ratings on Payback Period, use the absolute value of the PP subtracted from 10 (Example: if PP = 7 years, use (10 - 7) = 3 for the rating on that project) Apartment Office Park Shopping Building (40 8-room Center (100 units) offices) (8 stores) Alignment with Strategic Goals 10 10 10 10 NPV (use 6%) Payback Period Low Risk 58 88 TOTAL Weigh Turn in an Excel file that shows your calculations of NPV and PP, your completed decision matrix, & your written explanation of which project you chose and why

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_2

Step: 3

blur-text-image_3

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

Principles of Cost Accounting

Authors: Edward J. Vanderbeck

16th edition

9781133712701, 1133187862, 1133712703, 978-1133187868

More Books

Students also viewed these Accounting questions

Question

understand gender differences with regard to work-related outcomes;

Answered: 1 week ago