QUESTION You are reviewing a financial model prepared by someone who hasn't taken MRK516. The proposal being analyzed requires an upfront investment of $4.0 million and the company has a hurdle rate of 12%. The output from the individual's model shows a NPV of 50.5 million and an IRR of 8%. What do you conclude about the analysis and why? For the bar 10 ATG
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- quiz is acceptung Question 1 (10 points) The Internal Rate of Return is a financial measure that allows us to estimate: a The nominal value of the returns on a project. b The profitability of a potential investment in a project. The variance of returns on a project. The median of the returns on a project. Next Page Once you click Next Page you will not be able to change you answer Support | Schoology Blog I PRIVACY POI JUN 30 MacBook AirAssume that an investment is expected to generate the following returns: a 10% chance of a $1,400 return, a 50% chance of a $6,600 return, and a 40% chance of a $1,500 return. What is the expected rate of return on this investment? Note: The solution must be displayed on an Excel sheet using Excel functions such as =PV(...) and =FV(...) etc.MCS Corporation is considering two possible investments and needs your help in determining which will be the better financial option. Perform the necessary calculations using Microsoft Excel so that maximum precision can be obtained. (Unless indicated otherwise, enter your answers rounded to the nearest whole dollar/input code: 0). Investment Option "North" This potential investment is a little more risky and longer term, so it has a minimum rate of return of 17.60%. This investment would require an initial outlay of cash to purchase a piece of equipment for $131,000, and at the end of the 8- year life of this investment is expected to have a salvage value of $39,300. For each year of this investment, net annual cash inflows are expected to be $29,500. 1. How much is the present value of the purchase of equipment? 2. How much is the present value of the salvage value? 3. How much is the present value of the annual cash inflows? 4. How much is the Net Present Value? 5. What is the value…
- Please use Excel to solve the assignment and submit as an excel spreadsheet. Biolnov could lunch two new products onto the market. The expected cash flows and investments are represented in the table below. Assume that the required return in either investment is 6%. Year Nano Tests Micro Kits Initial Investment -$11,000 -$11,000 $4,000 $4,000 $4,000 $4,000 Year 1 $2,000 $3,000 $4,000 $5,000 Year 2 Year 3 Year 4 Year 5 $6,000 $4,000 1. Compute the payback period for each project. If the company requires at most three years to recover the initial investment, should we accept either or both projects? 2. Compute the discounted payback period for each project. If the company requires at most three years to recover the initial investment, should we accept either or both projects? 3. Compute the NP for each project. Should we accept either or both projects? 4. Compute the IRR for each project. Should we accept either or both projects? 5. If the projects are mutually exclusive (the company can…Show the answer on excel and how you did it: Puppet is evaluating two alternative, mutually exclusive methods for delivering cloud platforms It has developed the following estimated after-tax cost savings for each alternative. Project managers want to see an incremental IRR and NPV before making the decision. If the project discount rate is 9%, which method would you recommend? Explain and provide evidence. Show all cash flows and related analyses. Clearly specify your recommendation and reasoning clearly on your worksheet. clearly show inputs and outputs areas.(Input Area: Show all of your key inputs, with appropriate labels, before creating your analysis. Add lines as needed.)(Output Area: Show the development of your answers to each question below. Clearly label inputs, steps and identify key results.) Project cash flows are as follows: Software Solution 1: To: -115,000, T1: 45,000, T2: 40,000, T3: 35,000, T4: 20,000, T5: 10,000 Software Solution 2: To: -175,000, T1: 5,000,…Below are four cases that you will have to solve using Excel spreadsheets. 2nd case The COMPETIDORA SA company has the possibility of investing in three different projects . The projections show us the following information on which a decision must be made: PROJECT X Y Initial Z$310,000 It is requested: investment $180,000 $250,000 Year 1 cash flows $50,000 $80,000 $150,000 1. Determine the internal rate of return. 2. Determine the present value. Year 2 cash flows 3. Determine the recovery period. 4. Define which is the most viable project. $70,000 $80,000 $120,000 The discount rate for the project will be 9% and the investors propose a MARR of 22%. Year 3 cash flows $80,000 $80,000 $100,000 Year 4 cash flows $100,000 $80,000
- Calculate an IRR using an iterative technique. (Hint: Start by guessing 15%.) A project has the following cash flows C0 C1 C2 C3 ($700) $200 $500 $244 I'm not really understanding the IRR concept. please take the time to explain it to me and not just posting an Excel worksheetConsider an investment where the cash flows are: – $946.21 at time t = 0 (negative since this is your initial investment) $377 at time t = 1 in years $204 at time t = 2 in years $499 at time t = 3 in years (a) Use Excel's "Solver" to find the internal rate of return (IRR) of this investment. Take a screen shot showing Solver open with your entries for the function clearly visible. Paste the screen shot into an application (like Paint), and save it as a (.png) file. Upload your screenshot below. (b) What is the value of IRR found by Solver?E) You are an ángel investor, and 4 entrepreneurs have approached you to build some innovative folding tables, and the proposals are as follows. Project A, an investment of 499189 and annual cash flows respectively of 216982, 46543, 237780 and 531707. Project B, an investment of 455199 and annual cash flows respectively of 332309, 50801, 58123 and 322548. Project C, an investment of 508746 and annual cash flows respectively of 158321, 494359, 240543 and 98899. Project D, an investment of 557203 and annual cash flows respectively of 238377, 112884, 332960 and 311611. If the rate expected by you is 13.33% per year of compound interest. Which project is more profitable according to the NPV (Net Present Value)? OPTIONS: A B C D
- Below are four cases that you will have to solve using Excel spreadsheets. 1st case The company COMERCIAL SA has two investment alternatives that present the following information: PROJECT A B It is requested Initial investment. $25,000 $22,000 Cash flows year 1 1. Determine the internal rate of return. 2. Determine the present value. $7,000 $12,000 The discount rate for the project will be 10% and the MARR will be 20%. 3. Determine the recovery period. 4. Define which is the most viable project. Year 2 cash flows $15,000 $8,000 Year 3 cash flows $18,000 $12,000Rate of return analysis. Penne internal rate of return. The projested cash flow of a project (T-0 to T-5) is -S20,000. S2000, S8000, $12000, S8000, $2000, Briefly explain how you would caleulate the 1RR by nan and error if all you had was a hand calculator without financial funetion keys. DO NOT a. make any calculations.Use Microsoft Excel to assess the internal rate of return for an IT initiative. Suppose the initial investment is $60,000. The returns on investment in dollars for the following 5 years are (a) $10,000, (b) $12,000, (c) $15,000, (d) $21,000, and (e) $26,000. Use the IRR function to compute the internal rate of return after 2, 4, and 5 years. Next, assume that the loan for the initial $60,000 is at 8 percent and you are earning 16 percent on the annual returns. Use the MIRR function to calculate the internal rate of return. Required: 1. What is the Internal Rate of Return after 2 years? -46% -20% -1% -10% Required: 2. What is the Internal Rate of Return after 4 years? -46% -20% -1% 10% Required: 3. What is the Internal Rate of Return after 5 years? 10% 16% 8% 20%