Question
Please give an excel file with the solutions/ calculations shown (downloadable) please as well as a one-page A one-page memo explaining the results of your
Please give an excel file with the solutions/ calculations shown (downloadable) please as well as a one-page A one-page memo explaining the results of your analysis and your recommendation. The memo should include your reason(s) for choosing the capital budgeting method(s); important results of your analysis such as a summary table or graph; strengths, weaknesses, and consequences of each alternative and your reason(s) for recommending the proposed solution. The memo is limited to one page so be very selective on what information to include. An Excel spreadsheet showing calculation of the capital budgeting method(s) you selected and various discount rates in addition to the WACC.
Assignment Description: ABC Corporation has a machine that requires repairs or should be replaced. ABC has evaluated the two options and calculated the cash flows resulting from each option as follows: Option A: Repair the Machine Year Cash Flow 050,000 115,500 220,100 318,900 417,100 513,700 Option B: Buy a new Machine Year Cash Flow 0400,000 151,300 2155,000 3127,800 4126,900 5125,100 You have recently been hired by ABC Corporation and your first assignment is to help them decide which of these two options should be pursued. You would like to apply Capital Budgeting and Time Value of Money concepts you have learnt in your finance class to analyze the problem and present your recommendation to your boss, Ms. Jane Austen. The company has a Weighted Average Cost of Capital (WACC) of 12%. However, recent actions of the Federal Reserve indicated potential increase in interest rates in the near future. Things to turn in: 1. A one-page memo explaining the results of your analysis and your recommendation. The memo should include your reason(s) for choosing the capital budgeting method(s); important results of your analysis such as a summary table or graph; strengths, weaknesses, and consequences of each alternative and your reason(s) for recommending the proposed solution. The memo is limited to one page so be very selective on what information to include. 2. An Excel spreadsheet showing calculation of the capital budgeting method(s) you selected and various discountStep by Step Solution
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