Question: I need help with this problem. Project Option #2: Buy PolarBear Seltzer, Co. Expansion Project Title Project Description and Details Project Cost (Initial Investment) First

I need help with this problem.

Project Option #2: Buy PolarBear Seltzer, Co.
Expansion Project Title Project Description and Details Project Cost (Initial Investment) First Year Cash Flow Annual Growth Rate (5 years) Expenses as a percentage of Revenues Payback Period NPV IRR
Purchase of PolarBear Seltzer Company This company is based in Massachusetts and distributes their flavored seltzers nationally. While they have a large, loyal customer following, the company has exchanged hands multiple times. The current owners want out of the business, but it is uncertain as to why this is the case. The company is undervalued and the sale price reflects this. $15,000,000 $8,500,250 3.25% 54%
Calculation of Minimum Payback Period: Years
NPV of Projected Cash Flows
Year 0 Cash Flow Year 1 Cash Flow Year 2 Cash Flow Year 3 Cash Flow Year 4 Cash Flow Year 5 Cash Flow
Projected Revenues at annual growth rate
Projected Expenses at 54% of Revenue
Annual Cash Flows
Discount rate for each year (6%)
Present value of cash flows
NPV of Projected Cash Flows
Internal Rate of Return (IRR):

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

It seems like the question is related to analyzing the investment in a project specifically the purchase of PolarBear Seltzer Company The problem involves calculating the Payback Period Net Present Va... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!