Assignment Complete: The Following Numbered Problems 266228
Assignmentcomplete The Following Numbered Problems Using An Excel Spr
Complete the following numbered problems using an Excel spreadsheet. Each person is responsible for their own response to the questions. You must show your work to get full credit.
Paper For Above instruction
Problem 1: Consider the following cash flow data for two competing investment projects:
| n | Project A | Project B |
|---|---|---|
| 0 | $-1,500,000 | $-1,250,000 |
| 1 | $800,000 | $600,000 |
| 2 | $1,350,000 | $1,250,000 |
At a discount rate of 10%, which of the two projects would be a better choice? Using Excel, calculate the Net Present Value (NPV) for each project and compare the results to determine the better investment.
Problem 2: Consider the following cash flow for a given project:
| n | Cash Flow |
|---|---|
| 0 | $-5,000 |
| 1 | $1,000 |
| 2 | $1,250 |
| 3 | $2,000 |
| 4 | $2,250 |
| 5 | $3,000 |
| 6 | $3,250 |
(a) Find the conventional payback period for the project.
(b) Find the discounted payback period assuming an interest rate of 12%. Show your calculations in Excel, including the discounted cash flows each year and the cumulative discounted cash flows to identify when the initial investment is recovered.
Problem 3: Consider the following set of investment projects, each with a four-year investment life:
| n | Project A | Project B | Project C | Project D |
|---|---|---|---|---|
| 0 | $-2,000 | $-4,000 | $0 | $-7,500 |
| 1 | $-4,000 | $5,000 | $-1,000 | $1,500 |
| 2 | $2,000 | $-4,000 | $2,000 | $2,000 |
| 3 | $2,000 | $5,000 | $3,000 | $2,500 |
| 4 | $3,000 | $5,000 | $4,000 | $3,000 |
Using an Excel spreadsheet, compute the net future worth of each project at an interest rate of 7%.
Problem 4: Consider the following investment projects, each with a three-year investment life:
| n | Project A | Project B | Project C | Project D |
|---|---|---|---|---|
| 0 | $-5,000 | $-4,000 | $-7,500 | $-6,000 |
| 1 | $750 | $3,000 | $1,750 | $1,000 |
| 2 | $1,000 | $5,000 | $2,750 | $1,000 |
| 3 | $4,000 | $5,000 | $3,750 | $5,500 |
Using Excel, calculate the net present worth of each project at an interest rate of 6%.
Problem 5: B&C Manufacturing plans to purchase a new assembly machine costing $32,500 with an additional installation cost of $2,500. The new machine will save $10,000 annually in operating expenses and has a salvage value of $3,500 after 5 years. Determine how long it will take for the company to recover its total investment (purchase price plus installation costs), considering the annual savings and salvage value, assuming a simple payback period.
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