Question: Required information Excel Analytics 14-1 (Static) Internal Rate of Return [LO14-2, LO14-3] Stauffer Company has an opportunity to manufacture and sell a new product for
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Required information Excel Analytics 14-1 (Static) Internal Rate of Return [LO14-2, LO14-3] Stauffer Company has an opportunity to manufacture and sell a new product for a five-year period. The company estimated the following costs and revenues for the new product: Annual revenues and costs: When the project concludes in five years the working capital will be refeosed for imvestment elsewhere in the company. Click here to downlood the Excel temolate. which vou will wse to answer the guestions that follow. Click here for a brief tutorialon Goal Seck in Excel 3. In the Excel template, using Gool Seek, calculate this investment's internal rate of return. If the company's hurdle rate is 18% would it be likely to accept or reject the investment? Why? 4. What is the project's net present value when using a discount rate of 18% ? 5. If the company wants to achieve an 18\% return on this investment, what is the maximum amount that it can spend each year on fixed out-of-pocket operating costs? Use Goal Seek to compute your answet. Note: The fixed out-of-pocket operating costs remain constant for all five years, therefore modifying cell C13 automatically updates cells D13 through G13. 6. If the investment in working capital increased from $80,000 to $100,000 would you expect the internal rate of return to increase, decrease, or stay the same? No computations are necessary to answer this question. 7. Refer to the original data. Using Goal Seek, calculate the internal rate of return if the investment in working capital increases from $80,000 to $100,000. Note: Be sure to retum the fixed out-of-pocket operating costs to the original value of $200,0001. Complete this question by entering your answers in the tabs below. Using Microsoft Excel Goal Seek, calculate the investment's internal rate of return
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