Week 3 Assignment Part 1 & 2
Question # 00731250
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Updated on: 07/19/2019 05:57 AM Due on: 07/19/2019
Week 3 Assignment
For this Assignment, review the information in the scenario posted in the entry titled Week 3 Assignment located in the Doc Sharing link. You will utilize the information in this week’s Resources and media to make a recommendation in regard to a capital expenditure. There is also an Excel template provided in the same entry that you may find helpful in completing this Assignment.
The Assignment:
- Part 1: Prepare a spreadsheet using Excel or a similar program in which you compute the following for each proposed location.
- Accounting rate of return on investment
- Payback
- Net present value
- Internal rate of return
Note: Be sure to view the media for this week before starting this Assignment.
- Part 2: Utilizing Word or another word processing software program, prepare a written report for the Board of Directors. The intended audience is clear from the salutation and the language used throughout the report.
- Include a detailed and thorough explanation of the conclusion you reached regarding the feasibility of each proposal supported by the calculations prepared in Part 1.
- Explain at least five non-financial items (e.g., culture, language, etc.), which may impact the perceived desirability of each location.
- Select the one location you recommend the Board invest in. Explain your rationale in precise
Template_6
| Week 3 Template | |||||
| Given Information | Jakarta, Indonesia | Given Information | Bangkok, Thialand | ||
| Initial cash outlay | $ 3,500,000 | Initial cash outlay | $ 3,000,000 | ||
| Useful life | 20 | Useful life | 20 | ||
| Operating income | 750,000 | Operating income | 830,000 | ||
| The cost of capital | 9% | The cost of capital | 9% | ||
| Tax rate | 40% | Tax rate | 40% | ||
| Mumbai net cash flow | Net Income | Cash Flow | Bangalore net cash flow | Net Income | Cash Flow |
| Operating income | Operating income | ||||
| Depreciation | Depreciation | ||||
| Net Income before taxes | - 0 | Net Income before taxes | - 0 | ||
| Tax, 40% | - 0 | - 0 | Tax, 40% | - 0 | - 0 |
| Net Income | $ - 0 | Net Income | $ - 0 | ||
| Net cash flow | $ - 0 | Net cash flow | $ - 0 | ||
| Average net income and average book value of investment | Average net income and average book value of investment | ||||
| Year | Net Income | Avg BV of Investment | Year | Net Income | Avg BV of Investment |
| 1 | $ - 0 | 1 | - 0 | ||
| 2 | - 0 | 2 | - 0 | ||
| 3 | - 0 | 3 | - 0 | ||
| 4 | - 0 | 4 | - 0 | ||
| 5 | - 0 | 5 | - 0 | ||
| 6 | - 0 | 6 | - 0 | ||
| 7 | - 0 | 7 | - 0 | ||
| 8 | - 0 | 8 | - 0 | ||
| 9 | - 0 | 9 | - 0 | ||
| 10 | - 0 | 10 | - 0 | ||
| 11 | - 0 | 11 | - 0 | ||
| 12 | - 0 | 12 | - 0 | ||
| 13 | - 0 | 13 | - 0 | ||
| 14 | - 0 | 14 | - 0 | ||
| 15 | - 0 | 15 | - 0 | ||
| 16 | - 0 | 16 | - 0 | ||
| 17 | - 0 | 17 | - 0 | ||
| 18 | - 0 | 18 | - 0 | ||
| 19 | - 0 | 19 | - 0 | ||
| 20 | - 0 | 20 | - 0 | ||
| Average | $ - 0 | ERROR:#DIV/0! | Average | - 0 | ERROR:#DIV/0! |
| Mumbai | Bangalore | ||||
| a. | Average rate of return on investment | a. | Average rate of return on investment | ||
| Type the formula here. Put the answer in D49 | Type the formula here. Put the answer in I49 | ||||
| b. | Payback period | b. | Payback period | ||
| Type the formula here. Put the answer in D53 | years | Type the formula here. Put the answer in I53 | years | ||
| c. | Net present value - using table page 126 | c. | Net present value - using table page 126 | ||
| Amount | Factor | Present value | Amount | Factor | Present value |
| Initial investment | $ - 0 | Initial investment | $ - 0 | ||
| Annual net cash flow for 20 years | - 0 | Annual net cash flow for 20 years | - 0 | ||
| Net present value | $ - 0 | Net present value | $ - 0 | ||
| Using MS Excel: | Using MS Excel: | ||||
| Initial investment | Initial investment | ||||
| PV of Annual net cash flow for 20 years | PV of Annual net cash flow for 20 years | ||||
| Net present value | $ - 0 | Net present value | $ - 0 | ||
| d. | Profitability Index | d. | Profitability Index | ||
| Type the formula here. Put the answer in D68 | Type the formula here. Put the answer in I68 | 0.00 | |||
| d. | Internal rate of return | e. | Internal rate of return | ||
| Using MS Excel: | Using MS Excel: | ERROR:#NUM! | |||
| Period | Period | ||||
| 0 | 0 | ||||
| 1 | 1 | ||||
| 2 | 2 | ||||
| 3 | 3 | ||||
| 4 | 4 | ||||
| 5 | 5 | ||||
| 6 | 6 | ||||
| 7 | 7 | ||||
| 8 | 8 | ||||
| 9 | 9 | ||||
| 10 | 10 | ||||
| 11 | 11 | ||||
| 12 | 12 | ||||
| 13 | 13 | ||||
| 14 | 14 | ||||
| 15 | 15 | ||||
| 16 | 16 | ||||
| 17 | 17 | ||||
| 18 | 18 | ||||
| 19 | 19 | ||||
| 20 | 20 |
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Rating:
/5
Solution: Week 3 Assignment Part 1 & 2