can yoh show me how to do this in excel. All cells inserted properly ...

50.1K

Verified Solution

Question

Finance

can yoh show me how to do this in excel. All cells inserted properly
image
this was the question but my excel sheet is modfied
image
H K L M IN D G - Mail Jamie Dermott Modified (use the modified cash flows below for Projects A & B 2 Year Project Project 0 $200,000.00 $235.000.00 1 $70,000.00 $SS.COM.BR 2 $80,000.00 $60,000.00 3 570,000.00 sao.gov.co 4 $40,000.00 S90.000 DO 5 $40,000.00 SHOQOO OO 0 and open dent Projects 9 0 2 33. Mutually Exclusive Projects (Timing Disparity) 5 6 7 8 19 10 11 12 13 14 15 16 17 19 analyst at Caledonia Products. When Jamie arrived at work on Friday morning, he found the following memo in his e-mail: TO: Jamie Dermott FROM: V. Morrison, CFO, Caledonia Products RE: Capital-Budgeting Analysis Povido on evaluaton of two proposed projects with the fol lowing cash low forecasts: Year O cinitial outlay) 2 Project A $(110,000) 20,000 30,000 40,000 50.000 70,000 Project S[110.000) 40,000 40,000 40,000 40,000 40,000 4 5 Because these projects involve additions to Caledonia's highly successful Avalon product ine, the company requires a rate of return on both projects equal to 12 percent. As you are no doubt aware, Caledonia relies on a number of criteria when evaluating new investment opportunities. In particular, we re- quire that projects that are accepted have a payback period of no more than three years, provide a positive NPV, and have an RR that exceeds the firm's discount rate Give me your thoughts on these two projects by 9 AM Monday moming Jamie was not surprised by the memo for he had been ex- pecting something like this for some time. Caledonin followed a practice of testing cach new financial analyst with some type of project evaluation exercise after the new hire had been on the job for a few months After rereading the memo, Jamie decided on his plan of attack Specifically, he would first do the obligatory calcu- lations of payback period, NPV, and IRR for both projects Jamie knew that the CFO would grill him thoroughly on Mon- day morning about his analysis, so he wanted to prepare well for the experience. One of the things that occurred to Jamie was that the memo did not indicate whether the two projects were independent or mutually exclusive. So, just to be safe, he thought he had better rank the two projects in case he was asked to do so on Monday morning. Jamie sat down and made up the following to do list: 1. Compute payback period, NPV, and IRR for both projects. 2. Evaluate the two projects' acceptability using all three deci sion criteria (listed above) and basing the conclusion on the assumption that the projects are independent--that is, that both could be accepted if both are acceptable. 3. Rank the two projects and make a recommendation as to which if either) should be accepted under the assumption that the projects are mutually exclusive Assignment: Prepare Jamie's evaluation for his Monday meeting with the CFO by completing his "to do list

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students