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    "url": "\/study-help\/questions\/using-the-template-provided-analyze-the-project-1-with-net-4443552",
    "question_creation_date_js": "2024-06-29T01:56:37-04:00",
    "question_creation_date": "Jun 29, 2024 01:56 AM",
    "meta_title": "[Solved] Using the template provided, analyze the | SolutionInn",
    "meta_description": "Answer of - Using the template provided, analyze the project #1 with Net Present Value, Internal Rate of Return, Payback Period, a | SolutionInn",
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    "question_title_h1": "Using the template provided, analyze the project #1 with Net Present Value, Internal Rate of Return, Payback Period, and Modified Payback Period. Please include Excel",
    "question_title": "Using the template provided, analyze the project #1 with Net Present Value,",
    "question_title_for_js_snippet": "Using the template provided, analyze the project  1 with Net Present Value, Internal Rate of Return, Payback Period, and Modified Payback Period  Please include Excel formula  Repeat the NPV, IRR, Payback, and Modified Payback analyses for high and low confidence estimates of this project's net annual positive cash flows  Josephine Joline Jones, Chief Financial Office of Jo Jo's Circus has been investigating opportunities to expand her operations  She has two projects that she is considering  Project  1  Dancing Horses on Parade Requires the purchase and training of thoroughbred Clydesdale horses, estimated to cost $1,931,400 upfront  In addition, due to the seasonal and transitional nature of the circus industry, Jo Jo estimates that she will need to dedicate working capital of $38,000 at the beginning of the project  The $38,000 working capital will become available once the project's life is over  Jo Jo expects the project to yield positive net annual cash flows over the project's expected 8 year life as follows  End of 1st Year  $320,000 End of 2nd Year  $384,000 End of 3rd Year  $480,000 End of 4th Year  $565,000 End of 5th Year  $685,000 End of 6th Year  $531,000 End of 7th Year  $424,700 End of 8th Year  $340,000 Although Jo Jo full expects the project to be successful, she believes that the Net Annual Cash Flows may range between 80  and 120  of her estimates above  Jo Jo expects to retire and sell the horses at the end of the 8 years for $112,500 Project  1 Capital Budgeting Case Template Cash Flow Information Initial Investment Working Capital Salvage Value Expected Project Life (Years) Year  1 Year  2 Year  3 Year  4 Year  5 Year  6 Year  7 Year  8 Net annual operating cash flows nvestors Cost of Capital (Required Return 0 Initial Investment Net annual operating cash flows Working Capital Salvage value of equipment Total Net Cash Flows x present value discount factor Present Value of Cash Flows Net Present Value Recommendation  Low Confidence Net Present Value Recommendation  High Confidence Net Present Value Recommendation  Part 2   Calculate the Internal Rate of Return of the Capital Investment  Intemal Rate of Return Recommendation  Low Confidence Intemal Rate of Retum Recommendation  High Confidence Intemal Rate of Retum Recommendation  Part 3   Calculate the Payback Period of the Capital Investment  Today End of Year End of Year End of Year End of Year End of Year End of Year End of Year End of Year Payback Method 0 6 8 Cumulative Cash Flows Payback Year years Low Confidence Payback Year years High Confidence Payback Year years Part 4   Calculate the Modified Payback Period of the Capital Investment  End of Year End of Year End of Year End of Year End of Year End of Year End of Year End of Year Modified Payback Method Today 5 Cumulative Cash Flows Payback Year years Low Confidence Payback Year years High Confidence Payback Year years",
    "question_description": "<p>Using the template provided, analyze the project #1 with Net Present Value, Internal Rate of Return, Payback Period, and Modified Payback Period. Please include Excel formula.<\/p><p> <\/p><p>Repeat the NPV, IRR, Payback, and Modified Payback analyses for high and low confidence estimates of this project's net annual positive cash flows.<\/p><p> <\/p><p>Josephine Joline Jones, Chief Financial Office of Jo Jo's Circus has been investigating opportunities to expand her operations. She has two projects that she is considering:<\/p><p> <\/p><p>Project #1: Dancing Horses on Parade<\/p><ul><li>Requires the purchase and training of thoroughbred Clydesdale horses, estimated to cost $1,931,400 upfront.<\/li><li>In addition, due to the seasonal and transitional nature of the circus industry, Jo Jo estimates that she will need to dedicate working capital of $38,000 at the beginning of the project. The $38,000 working capital will become available once the project's life is over.<\/li><li>Jo Jo expects the project to yield positive net annual cash flows over the project's expected 8-year life as follows:<\/li><li>End of 1st Year: $320,000<\/li><li>End of 2nd Year: $384,000<\/li><li>End of 3rd Year: $480,000<\/li><li>End of 4th Year: $565,000<\/li><li>End of 5th Year: $685,000<\/li><li>End of 6th Year: $531,000<\/li><li>End of 7th Year: $424,700<\/li><li>End of 8th Year: $340,000<\/li><li>Although Jo Jo full expects the project to be successful, she believes that the Net Annual Cash Flows may range between 80% and 120% of her estimates above.<\/li><li>Jo Jo expects to retire and sell the horses at the end of the 8 years for $112,500<\/li><\/ul><p> <\/p><p> <\/p><p>Project #1<\/p><p><\/p><div><div><div><img src=\"https:\/\/s3.amazonaws.com\/si.experts.images\/answers\/2024\/06\/667fa2157ed76_597667fa21560c18.jpg\" alt=\"image text in transcribed\"><\/div><\/div><\/div> Capital Budgeting Case Template Cash Flow Information Initial Investment Working Capital Salvage Value Expected Project Life (Years) Year #1 Year #2 Year #3 Year #4 Year #5 Year #6 Year #7 Year #8 Net annual operating cash flows nvestors Cost of Capital (Required Return 0 Initial Investment Net annual operating cash flows Working Capital Salvage value of equipment Total Net Cash Flows x present value discount factor Present Value of Cash Flows Net Present Value Recommendation? Low Confidence Net Present Value Recommendation? High Confidence Net Present Value Recommendation? Part 2 - Calculate the Internal Rate of Return of the Capital Investment: Intemal Rate of Return Recommendation? Low Confidence Intemal Rate of Retum Recommendation? High Confidence Intemal Rate of Retum Recommendation? Part 3 - Calculate the Payback Period of the Capital Investment: Today End of Year End of Year End of Year End of Year End of Year End of Year End of Year End of Year Payback Method 0 6 8 Cumulative Cash Flows Payback Year years Low Confidence Payback Year years High Confidence Payback Year years Part 4 - Calculate the Modified Payback Period of the Capital Investment: End of Year End of Year End of Year End of Year End of Year End of Year End of Year End of Year Modified Payback Method Today 5 Cumulative Cash Flows Payback Year years Low Confidence Payback Year years High Confidence Payback Year years",
    "transcribed_text": "",
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