Suppose that Bloopers customers paid their bills with an average 3-month delay (instead of 2 months) and that Bloopers inventories were 20% rather than 15% of next years expenses. Use the below Blooper spreadsheet.
See SPREADSHEET 9.1 in the eBook for the baseline project evaluation and resulting NPV assuming 15% inventory expense SPREADSHEET 9.1 Financial projections for Blooper's Magnoosium mine (dollar values in thousands)
| Inputs | | Spreadsheet Name |
| Initial Investment | 16,000 | Investment |
| Salvage value | 3,200 | Salvage |
| Initial revenue | 18,600 | Initial_rev |
| Initial expenses | 12,400 | Intial_exp |
| Inflation rate | 0.05 | Inflation |
| Discount rate | 0.12 | Disc_rate |
| Acct receiv. as % of sales | 1/4 | A_R |
| Inven. as % of expenses | 0.2 | Inv_pct |
| Tax rate | 0.21 | Tax_rate |
| |
a. Would project NPV be higher or lower than that in the Blooper spreadsheet?
multiple choice
b. Calculate Bloopers working capital in each year of its project. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
c. What is the change in project NPV?
Suppose that Blooper's customers paid their bills with an average 3-month delay (instead of 2 months) and that Blooper's inventories were 20% rather than 15% of next year's expenses. Use the below Blooper spreadsheet. See SPREADSHEET 9.1 in the eBook for the baseline project evaluation and resulting NPV assuming 15% inventory expense SPREADSHEET 9.1 Financial projections for Blooper's Magnoosium mine (dollar values in thousands) Spreadsheet Inputs Name Initial Investment 16,000 Investment Salvage value 3,200 Salvage Initial revenue 18,600 Initial_rev Initial expenses 12,400 Intial_exp Inflation rate 0.05 Inflation Discount rate 0.12 Disc_rate Acct receiv. as % of sales 1/4 A_R Inven. as % of expenses 0.2 Inv_pct Tax rate 0.21 Tax_rate a. Would project NPV be higher or lower than that in the Blooper spreadsheet? Lower Higher b. Calculate Blooper's working capital in each year of its project. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Year Working Capital 0 1 2 3 4 5 6 c. What is the change in project NPV? (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) The NPV increases from $4,223 to Suppose that Blooper's customers paid their bills with an average 3-month delay (instead of 2 months) and that Blooper's inventories were 20% rather than 15% of next year's expenses. Use the below Blooper spreadsheet. See SPREADSHEET 9.1 in the eBook for the baseline project evaluation and resulting NPV assuming 15% inventory expense SPREADSHEET 9.1 Financial projections for Blooper's Magnoosium mine (dollar values in thousands) Spreadsheet Inputs Name Initial Investment 16,000 Investment Salvage value 3,200 Salvage Initial revenue 18,600 Initial_rev Initial expenses 12,400 Intial_exp Inflation rate 0.05 Inflation Discount rate 0.12 Disc_rate Acct receiv. as % of sales 1/4 A_R Inven. as % of expenses 0.2 Inv_pct Tax rate 0.21 Tax_rate a. Would project NPV be higher or lower than that in the Blooper spreadsheet? Lower Higher b. Calculate Blooper's working capital in each year of its project. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Year Working Capital 0 1 2 3 4 5 6 c. What is the change in project NPV? (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) The NPV increases from $4,223 to
