THIS IS THE 3RD TIME I AM POSTING THIS QUESTION SAYING TO SHOW THE WORK AND FILL IN ALL YELLOW CELLS IF THERE IS NO WORK I WILL DISLIKE THE PROBLEM AGAIN
FINA 3562 Project 3 Learning objective: Students will learn how to use different methods to evaluate investment proposals. Requirements: Please analyze the following problem and answer questions by deriving the solutions in Excel spreadsheets. You can use Project 3 Format.xlsx to work on this project. This file is available on Blackboard. Please set formulae by referencing to the data in Excel spreadsheets. If you do not meet this requirement, you will be asked to re-work on the project. This project accounts for 6% of your overall grade. Due date: April 16th, 11:59 pm on Blackboard Problem: Bosa Recreation Corp. is evaluating two mutually exclusive projects: Deepwater fishing and submarine ride projects. Assume the discount rate for both projects is 15 percent. The costs of investment and projected cash flows for both projects are given in the following table: Year DEEPWATER FISHING SUBMARINE RIDE $835,000 $1,750,000 1 $405,000 1,050,000 2 $410,000 685,000 3 $335,000 520,000 0 Questions 1 What is the payback period of each project? Based on the payback period, which project should be taken? 2. What is the profitability index of each project? Based on the profitability index, which project should be taken? 3. What is the internal rate of return (IRR) of each project? Based on the IRR, which project should be taken? 4 What is the net present value (NPV) of each project? Based on the NPV, which project should be token?? For additional reference, you can review Examples 3, 17, 19, and 20 in Chapter 20 Examples.xlsx posted on Blackboard for how to compute the payback period, profitability index, IRR and NPV. Formatting as Table B C Year Cash flows 0 1 Deepwater Fishing Submarine Ride Cash flows Required return (used as the discount rate) 15% Part 1: Deepwater Fishing Initial cash outlay Accumulated cash inflows Payback period Initial cash outlay Accumulated cash inflows Payback period Submarine Ride Which project should be taken? + Part 2: Deepwater Fishing Present value of cash inflows Present value of cash outflows Profitability index Submarine Ride Present value of cash inflows Present value of cash outflows Profitability index Sheet1 Sheet2 + stv Number Morges Center 38 Conditional Format Formatting as Table A D Present value of cash inflows Present value of cash outflows Profitability Index Present value of cash inflows Present value of cash outflows Profitability Index Which project should be taken? 9 Part 2: Deepwater Fishing 1 2 3 24 Submarine Ride 25 26 27 28 29 30 Part 3: 31 Deepwater Fishing 32 Submarine Ride 33 34 35 36 Deepwater Fishing 37 Submarine Ride 38 39 40 41 42 43 Internal rate of return (IRR) Internal rate of return (IRR) Which project should be taken? Part 4: Net present value (NPV) Net present value (NPV) Which project should be taken? 44 45 Sheet1 Sheet2 + New
