Question: PLEASE SOLVE USING EXCEL - THANK YOU!! HERE IS PART 1 The Federal Reserve is now expected to implement contractionary monetary policy to fight inflation

PLEASE SOLVE USING EXCEL - THANK YOU!!
 PLEASE SOLVE USING EXCEL - THANK YOU!! HERE IS PART 1
The Federal Reserve is now expected to implement contractionary monetary policy to
HERE IS PART 1
fight inflation and raise interest rates 75 basis points (0.75%). Now, ABC

The Federal Reserve is now expected to implement contractionary monetary policy to fight inflation and raise interest rates 75 basis points (0.75%). Now, ABC 's cash reserves in the money market will yield 3.6% (rather than 2.85% ), and the cost of borrowing money through the bond issue is 5.9% (rather than 5.15% ). 6) Calculate: WACC and NPV manually (discounting each cash flow for NPV) 7) Re-calculate NPV using the NPV equation. 8) Calculate IRR and NPV Profile 9) In your Excel worksheet, discuss whether ABC should invest or not invest in this capital expenditure now that the cost of capital is higher. Research our current state of the economy and the contractionary policy that many economists expect of the Fed. Discuss how a recession can intensify as a result. Include your findings from this problem to back up your statements. Be complete and thorough in your explanation. The upgraded machinery has a 6-year useful life and a 700K residual value. The machinery is expected to bring in additional revenues of: Year 1: $700,000 Year 2: $725,000 Year 3: $775,000 Year 4: $800,000 Year 5: $850,000 Year 6: $1,000,000 \#2: The ABC Corporation is considering the acquisition of a 4.7M upgrade of all machinery in the semiconductor manufacturing division. ABC will use 2.2M of current cash reserves that is yielding 2.85% in the money market and the remaining 2.5M will be financed through debentures (corporate bonds). ABC will pay 5.15% coupon rate (interest rate) to these bondholders. In short, ABC is using 2.2M cash and 2.5M is being borrowed. The firm's effective tax rate is 21.4%. The upgraded machinery has a 6-year useful life and a 700K residual value. The machinery is expected to bring in additional revenues of: Year 1: $700,000 Year 2: $725,000 Year 3: \$775,000 Year 4: \$800,000 Year 5: $850,000 Year 6: $1,000,000 1) Calculate: WACC and NPV manually (discounting each cash flow for NPV). 2) Re-calculate NPV using the NPV equation. 3) Calculate IRR. 4) Create a NPV Profile for this scenario 5) In your Excel worksheet, discuss whether ABC should invest or not invest in this capital expenditure

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