EXCEL PART: Submission format: Excel File ABC Corporation has a machine that requires repairs or should...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
EXCEL PART: Submission format: Excel File ABC Corporation has a machine that requires repairs or should be replaced. ABC has evaluated the two options and calculated the cash flows resulting from each option as follows: Option A: Repair the Machine Year Cash Flow 0$61,500.00 1 $16,500.00 2 $33,100.00 3 $17,500.00 4 $17,200.00 5 $10,700.00 Option B: Buy a new Machine Year Cash Flow 1 $54,300.00 2 WRITING PART: Submission format: Word Document You have recently been hired by XYZ corporation and your first assignment is to help them decide which of these two options should be pursued. You would like to apply the capital budgeting and Time Value of Money concepts you have learnt in FIN 301 to analyze the solution and present it to your boss in three days. Conduct the analysis and calculate Payback period for each option, IRR of each option and Pl and NPV for each option at four Discount Rates (R) of 8%, 12%, 16%, and 20% Write a memo to your boss, explaining the results of your analysis, your decision and include a table and a chart showing your analysis. " Requirements: A B 1 Compute Pay Back for each Option 2 Compute IRR for each Option Pay Back IRR Compute NPV and PI for each option using disccount rates: 4 #3456 R NPV A NPV B 8% 12% 16% 20% = R PIA PIB 7 8% B 12% 9 16% 10 20% 11 NPV Profile chart with R on X Axis and NPV on Y axis (Two lines one each for NPV A and NPV 8) 12 A One page professional memo written in MS Word explaining your decision betwwen options A and B. EXCEL PART: Submission format: Excel File ABC Corporation has a machine that requires repairs or should be replaced. ABC has evaluated the two options and calculated the cash flows resulting from each option as follows: Option A: Repair the Machine Year Cash Flow 0$61,500.00 1 $16,500.00 2 $33,100.00 3 $17,500.00 4 $17,200.00 5 $10,700.00 Option B: Buy a new Machine Year Cash Flow 1 $54,300.00 2 WRITING PART: Submission format: Word Document You have recently been hired by XYZ corporation and your first assignment is to help them decide which of these two options should be pursued. You would like to apply the capital budgeting and Time Value of Money concepts you have learnt in FIN 301 to analyze the solution and present it to your boss in three days. Conduct the analysis and calculate Payback period for each option, IRR of each option and Pl and NPV for each option at four Discount Rates (R) of 8%, 12%, 16%, and 20% Write a memo to your boss, explaining the results of your analysis, your decision and include a table and a chart showing your analysis. " Requirements: A B 1 Compute Pay Back for each Option 2 Compute IRR for each Option Pay Back IRR Compute NPV and PI for each option using disccount rates: 4 #3456 R NPV A NPV B 8% 12% 16% 20% = R PIA PIB 7 8% B 12% 9 16% 10 20% 11 NPV Profile chart with R on X Axis and NPV on Y axis (Two lines one each for NPV A and NPV 8) 12 A One page professional memo written in MS Word explaining your decision betwwen options A and B.
Expert Answer:
Answer rating: 100% (QA)
MEMO To Boss From Your Name Date Current Date Subject Analysis of Options A and B for Machine Repair... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
ABC Corporation has a machine that requires repairs or should be replaced. ABC has evaluated the two options and calculated the cash flows resulting from each option as follows: Option A: Repair the...
-
You have recently been hired by ABC Corporation and your first assignment is to help them decide which of these two options should be pursued You would like to apply Capital Budgeting and Time Value...
-
Prepare a set of profile leveling notes for the data listed and show the page check. All data is given in feet. The elevation of BM A is 1364.58, and the elevation of BM B is 1349.26. Rod readings...
-
What accounts for these differences in the wide range of compensation paid to CEOs in Europe, the United Kingdom, and the United States?
-
An insulated gas turbine receives a mixture of 10% CO2, 10% H2O and 80% N2 on a mole basis at 1000 K, 500 kPa. The volume flow rate is 2 m3/s and its exhaust is at 700 K, 100 kPa. Find the power...
-
The probability that a turbine will have a defective coil is 0.10, the probability that it will have defective blades is 0.15, and the probability that it will have both defects is 0.04. (a) What is...
-
GoGo Juice is a combination gas station and convenience store located at a busy intersection. Recently a national chain opened a similar store only a block away; consequently sales have decreased for...
-
Consider a version of Solow's Model: Y = AKL-a SY K+1 K++8Kt Lt = Lo(1+n)t 1 a) Rewrite the production function and the equation of capital accummulation using variables normalized by the units of...
-
1. Tesla uses lease accounting for automotive sales under its resale value guarantee program. Assume that instead of using lease accounting for automotive sales under its resale value guarantee...
-
The concept of compound interest refers to: a) earning interest only on the original investment b) payment of interest on previously paid interest c) investing for a multi-year period of time d)...
-
As wind speed is reduced, what happens to the sediment carried by wind?
-
Sometimes the atmospheres temperature doesnt decrease with altitude in a normal way. Instead, warmer air sits on top of colder air in a temperature inversion. What effect can this have on local air...
-
Can ice wedging weather human-made materials? Give an example.
-
Identify one depositional landform produced by running water.
-
Identify one landform produced by deposition from ocean waves.
-
SoundLab Inc. manufactures two models of speakers, DL and XL. Based on the following production and sales data for September 2016, prepare (a) a sales budget and (b) a production budget: DL XL...
-
The diagram shows the two forces acting on a small object. Which of the following is the resultant force on the object? A. 8 N downwards B. 8 N upwards C. 2 N downwards D. 2 N upwards 3 N 5 N
-
What is the IASBs principles-based approach to accounting standard setting?
-
What was the net impact on Keefer Companys Year 1 income as a result of this fair value hedge of a firm commitment? a. $0. b. An $860.60 decrease in income. c. A $1,100.00 increase in income. d. A...
-
Which of the following best describes the accounting for goodwill subsequent to initial recognition? a. Goodwill is amortized over its expected useful life, not to exceed 20 years. b. Goodwill is...
-
solve the given problem using PSO method \[f(X)=1200\left(2 x_{1} x_{3}+2 x_{2} x_{3} ight)+2500 x_{1} x_{2}+500\left(\frac{1000}{x_{1} x_{2} x_{3}} ight)+100\left(\frac{1000}{10 x_{1} x_{2} x_{3}}...
-
Show 3 iterations for solving the problem below \[\min f(X)=-12 x_{1}-7 x_{2}+x_{2}^{2}\] subject to $-2 x_{1}^{4}-x_{2}+2=0$ \[0 \leq x_{1} \leq 3,0 \leq x_{2} \leq 3\]
-
Solve the optimization problem using SA \[\min f(X)=100\left(x_{1}^{2}+x_{2} ight)^{2}+\left(1-x_{1} ight)^{2}\] subject to $X \in[0,7]$
Study smarter with the SolutionInn App