*Please show all excel formulas
used* Thank you!
Homework Answers
Net present value is the most commonly used technique for taking capital budgeting decisions in order to determine whether the long term project is worthy of funding or not. The criteria for choosing a project by taking net present value in consideration is that the project should generate a positive net present value.
Calculation of the annual depreciation of the machine using the straight line depreciation method:-
Annual depreciation= Initial cost / Useful life
= 990,000 / 5= $198,000
Using Excel, proforma Income Statement is made:-
The formula sheet of the above Cash flow worksheet is given below:-
We can now calculate the net present value of the machine using the following formula:-
Calculation of Net Present Value using Excel is done below :-
The formula sheet of the above NAV worksheet is given below:-
The net present value of the investment is $334959.5197
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*Please show all excel formulas
used* Thank you!
29. Project Analysis and Inflation Earp Brothers, Inc.,...
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Project Analysis and Inflation Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of the machine will be $1.2 million, and its economic life is five years. The machine will be fully depreciated by the straight- line method. The machine will produce 25,000 keyboards each year. The price of each keyboard will be $47 in the first year and will increase by 3 percent per year. The production cost per keyboard will be $17...
Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of...
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Please only answer if you know the answer to it. 3. Inflation in project analysis Aa...
Please only answer if you know the answer to it.
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3. Inflation in project analysis Aa Aa It is often easy to overlook the impact of...
3. Inflation in project analysis Aa Aa It is often easy to overlook the impact of inflation on the net present value of the project. Not incorporating the impact of inflation in determining the value of the cash flows of the project can result in erroneous estimations. Consider the following scenario: Houston and Smith Corp. is considering opening a new division to produce units that it expects to sell at a price of $15,700 each in the first year of...
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Please answer using excel ONLY & add formulas 123 Inc. is considering purchasing a new machine....
Please answer using excel ONLY & add formulas
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PLEASE SHOW EXCEL FORMULAS USED TO SOLVE Suppose a stock had an initial price of $79...
PLEASE SHOW EXCEL FORMULAS USED TO SOLVE
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Project Analysis and Inflation Dickinson Brothers, Inc., is considering investing in a machine to produce computer keyboards. The price of the machine will be $1.2 million, and its economic life is five years. The machine will be fully depreciated by the straight- line method. The machine will produce 25,000 keyboards each year. The price of each keyboard will be $47 in the first year and will increase by 3 percent per year. The production cost per keyboard will be $17...
Please only answer if you know the answer to it.
3. Inflation in project analysis Aa Aa E It is often easy to overlook the impact of inflation on the net present value of the project. Not incorporating the impact of inflation in determining the value of the cash flows of the project can result in erroneous estimations. Consider the following scenario: Sto Associates Co. is considering opening a new division to produce units that it expects to sell at...
3. Inflation in project analysis Aa Aa It is often easy to overlook the impact of inflation on the net present value of the project. Not incorporating the impact of inflation in determining the value of the cash flows of the project can result in erroneous estimations. Consider the following scenario: Houston and Smith Corp. is considering opening a new division to produce units that it expects to sell at a price of $15,700 each in the first year of...
Please answer using excel ONLY & add formulas
123 Inc. is considering purchasing a new machine. The machine will cost $3,500,000. The machine will be used for a project that lasts 3 years. The expected salvage of the machine at the end of the project is $300,000. The machine will be used to produce widgets. The marketing department has forecasted that the company will be able to sell 280,000 widgets per year. The marketing department believes that the company will...
PLEASE SHOW EXCEL FORMULAS USED TO SOLVE
Suppose a stock had an initial price of $79 per share, paid a dividend of $1.45 per share during the year, and had an ending share price of $88. What was the dividend yield? The capital gains yield? nitial price Dividend paid Ending share prices Complete the following analysis. Do not hard code values in your calculations. Dividend yield Capital gains yield Suppose a stock had an initial price of $79 per share,...
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