Please use excel file to work out the time value examples in the slides for chapter 4 and upload your excel file here. Please use all the cell reference and time value functions to do all the calculations inside the excel. Please lay out your input information separately and label it clearly. 1. Suppose your company expects to increase unit sales of widgets by 15% per year for the next 5 years. If you currently sell 3 million widgets in one year, how many widgets do you expect to sell during the fifth year? 2. You want to begin saving for your daughter's college education and you estimate that she will need $150,000 in 17 years. If you feel confident that you

Please use excel file to work out the time value examples in the slides for chapter 4 and upload your excel file here. Please use all the cell reference and time value functions to do all the calculations inside the excel. Please lay out your input information separately and label it clearly. 1. Suppose your company expects to increase unit sales of widgets by 15% per year for the next 5 years. If you currently sell 3 million widgets in one year, how many widgets do you expect to sell during the fifth year? 2. You want to begin saving for your daughter's college education and you estimate that she will need $150,000 in 17 years. If you feel confident that you

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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(Use Calculator or Formula Approach) Suppose your company expects to increase unit sales of widgets by 15% per year for the next 5 years. If you concurrently sell 3 million widgets in one year, how many widgets do you expect to sell in 5 years?
Use Table 11-2 to solve the problem. The requirement for computer server capacity at a particular company is expected to increase at a rate of 15% per year for the next 5 years. If the server capacity is expected to be 1,300 gigabytes in 5 years, how many gigabytes of capacity are there today? Round to the nearest whole gigabyte. GB Need Help? Read It 5:05 PM
Prepare the financial section of a business case for the Cloud-Computing Case that is listed above this assignment in Canvas. Assume that this project will take eight months to complete (in Year 0) and will cost $600,000. The costs to implement some of the technologies will be $300,000 for year one and $200,000 for years two and three. Estimated benefits will start in year 1 at $400,000 and will be $600,000 for years 2 and 3. There is no benefit in year 0. Use the business case spreadsheet template (business_case_financials.xls) template provided below this assignment in Canvas to calculate the NPV, ROI, and the year in which payback occurs. Assume a 7 percent discount rate for the template. notes* Payback occurs in the first year that there is a positive value for cumulative benefits - costs. (*Negative values are presented in parenthesis) What I have so far is attached I need to make it so Pay back occurs in year 3 where there is positive cumulative benefits - costs.
Prepare the financial section of a business case for the Cloud-Computing Case that is listed above this assignment in Canvas. Assume that this project will take eight months to complete (in Year 0) and will cost $600,000. The costs to implement some of the technologies will be $300,000 for year one and $200,000 for years two and three. Estimated benefits will start in year 1 at$400,000 and will be $600,000 for years 2 and 3. There is no benefit in year 0. Use the business case spreadsheet template (business_case_financials.xls) template provided below this assignment in Canvas to calculate the NPV, ROI, and the year in which payback occurs. Assume a 7 percent discount rate for the template. notes* Payback occurs in the first year that there is a positive value for cumulative benefits - costs. (*Negative values are presented in parenthesis) Financial Analysis for Project Name Created by: Date: Note: Change the inputs, shown in green below (i.e. interest rate, number of…
Gidget has a new widget to bring to market. If the firm goes directly to market with the product, there is a 60% chance of success. However, the firm can conduct customer segment research, which will take a year and cost $5,000,000. By going through research, the company can better target potential customers and increase the probability of success to 75%. If successful, the widget will bring a present value profit (at the time of initial selling) of $90 million. If unsuccessful, the present value profit is only $15 million. The appropriate discount rate is 10%. Calculate the NPV for conducting customer segment research. (Enter whole numbers, e.g. 5 million should be 5,000,000)
Your boss has just presented you with the summary in the accompanying table of projected costs and annual receipts for a new product line. He asks you to calculate the IRR for this investment opportunity. What would you present to your boss, and how would you explain the results of your analysis? (It is widely known that the boss likes to see graphs of PW versus interest rate for this type of problem.) The company’s MARR is 10% per year.
You are CEO of Rivet Networks, maker of ultra-high_performance network cards for gaming computers, and you are considering whether to launch a new product. The product, the Killer X3000, will cost $900,000 to develop up front (year 0), and you expect revenues the first year of $800,000, growing to $1.5 million the second year, and then declining by 40% per year for the next 3 years before the product is fully obsolete. In years 1 through 5, you will have fixed costs associated with the product of $100,000 per year, and variable costs equal to 50% of revenues. а. What are the cash flows for the project in years 0 through 5? b. Plot the NPV profile for this investment from 0% to 40% in 10% increments. What is the project's NPV if the project's cost of capital is 10%? с. d. Use the NPV profile to estimate the cost of capital at which the project would become unprofitable; that is, estimate the project's IRR. Double-click the image to open the Excel spreadsheet and fill the cells Rivet…
You are evaluating a new project for Globex Corporation as the company is planning to launch a new and very efficient mobile device named Meta-5050. The new product is expected to run for 5 years. To produce this new product, Globex needs to purchase new equipment that will cost $750,000. The company needs to spend another $10,000 for shipping and installation. You estimate the sales price of Meta-5050 to be $650 per unit and sales volume to be 800 units in year 1; 1,400 units in years 2-4; and 500 units in year 5. The cost of the contents, packaging and shipping are expected to be $225 per unit and the annual fixed costs for this project are $150,000 per year. The equipment will be depreciated straight-line to zero over the 5-year project life. The actual market value (salvage value) of these assets at the end of year 5 is expected to be $35,000. If this project is taken up, inventory will increase by $72,000, accounts receivable will increase by $36,850, and accounts payable will…
Conduct the CVP analysis for your business for the upcoming five years. Specifically, you need to do the following:3.1 Calculate how many units of your product you will need to sell to break even in each of the upcoming five years. Fixed cost $120,000, Variable costs per unit $60, Sales price per unit $100 3.2 Calculate the margin of safety in units for each of the upcoming five years. 3.3 Decide how much you would like to make in before-tax operating income (target profit) in each of the upcoming five years. Calculate how many units you would need to sell in each of the upcoming years to meet those target profit levels.
An office building is currently for sale, and you are thinking of purchasing it. From your extensive market research and knowledge, you know the net operating income for this year is $315,000. You expect the net operating income will grow by 7% in the first five years, 5% in the subsequent five years, and 3.5% for every year after. If you are considering an 18-year investment window and desire a 16% rate of return, how much should you pay for the building?
Loadstar Sensors is a company that makes load/force sensors based on capacitive sensing technology. The company wants to accumulate $30 million for plant expansion five years from now. If the company already has $15 million in an investment account for the expansion, how much more must the company add to the account now so that it will have the $30 million 5 years from now? The account earns interest at 10% per year. Solve using (a) tabulated factors, and (b) a spreadsheet. Compare the answers.
You are CEO of Rivet Networks, maker of ultra-high performance network cards for gaming computers, and you are considering whether to launch a new product. The product, the Killer X3000, will cost $893,000 to develop up front (year 0), and you expect revenues the first year of $807,000, growing to $1.42 million the second year, and then declining by 45% per year for the next 3 years before the product is fully obsolete. In years 1 through 5, you will have fixed costs associated with the product of $107,000 per year, and variable costs equal to 45% of revenues. a. What are the cash flows for the project in years 0 through 5? b. Plot the NPV profile for this investment using discount rates from 0% to 40% in 10% increments. c. What is the project's NPV if the project's cost of capital is 9.4%? d. Use the NPV profile to estimate the cost of capital at which the project would become unprofitable; that is, estimate the project's IRR. a. What are the cash flows for the project in years 0…

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