Calculate the npv profitability index irr mirr

Assignment Help Finance Basics
Reference no: EM13230170

Frozen Turkeys Scenario 
Cost of Land $ 200,000 
Cost of Buildings & Equipment $ 350,000 
MACRS Class 20 
Life of Project (Years) 5 
Terminal Value of Land $ 300,000 
Terminal Value of Buildings & Equipment $ 175,000 
First year sales (pounds) 250,000 
Price per Pound $3.50 
Unit Sales Growth Rate 7.0% 
Variable Costs as % of Sales 62% 
Fixed Costs 75,000 
Tax Rate 35% 
WACC 10.0% 

a. Prepare a statement of annual cash flows for years 0 through 5. Cash flows in year 0 are your expenses for building and land. 
Sales growth is based on the annual growth rate in units. 
Assume no changes in fixed or variable costs. 
Depreciate the project cost for 5 years, with the cash flow in year 5 to include the terminal cash flow of ending the investment. 

b. Calculate the NPV, profitability index, IRR, MIRR, payback and discounted payback of the cash flows in part 1. 

c. Using scenario manager find best case, worst case, base case of NPV based on sales in pounds, price per pound, and variable cost percent. Make sure to include scenario summary.

Reference no: EM13230170

Questions Cloud

Fishhook just went public and is considering a bond issue : FishHook (FH) just went public and is considering a bond issue with warrants attached
What are the limits that the actual value will fall under : an analog ammeter and the faceplate states an accuracy of +/- 1.5% of full scale value. if we take a measurement on the 10A scale and we measure 1.8A, what are the limits that the actual value will fall under.
What is the optimal oil exploration strategy : Assuming that prospecting and drilling take no time, what is the optimal oil exploration strategy for the firm (that is, where should it prospect, and when should it drill)?
Strategically identify new market opportunities : Market research and a competitive analysis are typically used in order to determine the feasibility of a new technology. How you could use advanced market research in order to remain competitive
Calculate the npv profitability index irr mirr : Calculate the NPV, profitability index, IRR, MIRR, payback and discounted payback of the cash flows in part 1.
What is the reorder point : The injection molding department of a company that operates 24x7 uses an average of 20 gallons of special lubricant per day. It takes two weeks for an order of lubricant to be delivered.
How will this influence the new store coordinates : Census tracts 103 and 105 are each projected to grow by 20% in the next year. How will this influence the new store's coordinates?
Determine what is the instantaneous voltage at t of signal : An AC signal has a peak value of 100 V and a frequency of 60 Hz. If the voltage crosses zero in a rising direction at t=0 seconds, what is the instantaneous voltage at t = 0.004167
Determine what is the mmf of the solenoid in ampere-turns : A 800 turn solenoid has a total wire length of 400 feet of AWG 24 copper wire. This wire has a resistance of 26.17 ohms per 1000 feet. The voltage measured from one end of the solenoid to the other is 21 volts. What is the mmf of the solenoid in a..

Reviews

Write a Review

Finance Basics Questions & Answers

  Determine value of the preferred share

A company issued a preferred stock which matures in thirty years and carries a maturity value of $45. The dividend is $4 per year over the 30 year period.

  Health administration requires the firm to install equipment

The Occupational Safety as well as Health Administration requires the firm to install new ventilating equipment in its plant, Theory Question regarding specific factors affecting firm's breakeven point

  Determining outstanding debt

Brookman Inc's latest EPS was $2.75, its book value per share was $22.75-How much debt was outstanding?

  Create hospitals base case projected p&l statement

General Hospital, a not profit acute care facility, has following cost structure for its inpatient services: Fixed costs $10,000,000, Variable cost per inpatient day $200

  Calculate the projected net income

Goran Blomberg is interested in investing in a new rooms-only lodging property. He needs some financial projections for the proposed operations.

  Explain what is the price of the bond which pays annual

Explain What is the price of the bond which pays annual interest and Both bonds are non-callable and have a face value of $1,000

  Find expected dividend yield and capital gains yield

Taussig Technologies Company has been increasing at a rate of 20 percent per year in recent years. This same supernormal growth rate is expected to last for another 2 years.

  Us treasury bond yield

Find out the amount of the coupon interest payment you would receive each year if you bought the bond? Find out the bond's Yield to Maturity, or YTM, assuming you purchased it for the current offering price?

  Compute the net income

McMaster Corporation, has a times interest earned ratio of 4.0. Based on this ratio, a creditor knows that McMasters EBIT must decline by more than before McMaster will be unable to cover its interest expense.

  Equity transactions and statement preparation

Record the journal entries for the transactions listed above. Prepare the stockholders' equity section of Mackeys Corporation's balance sheet as of December 31, 2010. Please explain how "Retained Earnings-Preferred Dividends" is calculated.

  Creation of a financial plan

Assignment overview This assignment has a management accounting orientation. It draws on management accounting topics that include budgeting, sensitivity analysis, cost volume profit analysis and decision-making.

  Computation npv and payback period and irr

Computation NPV and Payback Period and IRR and Selection of the Project and Summarise the preference dictated by each measure, and indicate which project you would recommend

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd