Objective: Students demonstrate ability to 1. Utilize several capital budgeting concepts. 2. Complete required calculations. 3. Develop a written...

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Finance

Objective: Students demonstrate ability to
1. Utilize several capital budgetingconcepts.
2. Complete required calculations.
3. Develop a written recommendation to senior management based onresulting data.
Scenario: D & H Enterprises is considering building a newplant overseas or expanding their product line.
                 Cost will be $3,500 million for either option. Discount rate forboth projects is 11%.
               Cash inflows for each options are below. Shownin millions:
Year
Option A: Build New
Option B: Expand Line
1
$ 1000
$ 500
2
1500
1500
3
3000
3500
4
4000
4000
Directions: Utilizing cell references and formulas, use the datain the Excel file provided to prepare
           A. Calculations – use the tabs provided fordetails of calculations – move final values tosummary tab using cell references.
1. Payback periodcalculation. Textbook page 384 has example. You need touse Excel to make your calculations.
                       2. Net Present Value – work the process step-by-step then utilizethe NPV formula under the
                                Formulas,Financials, tab. See Table 12.4 in text page 386 for example.
    Note: you will becalculating the NPV using the two methods shown on Table12.4.
                                Assume 11% as discount rate.*
                       3. Internal Rate of Return and Modified Internal Rate of Return –utilize the IRR and MIRR
                                formulas under theFormulas, Financial, tab in Excel. *See Table 12.5 in text page388
                                for example.Assume 4% as the reinvestment rate.
           B. Compose an email to senior management of D & H Enterprises(same format as Special Problem #1)…
1. Subject line states main purpose ofemail
2. Open email with salutation to yoursenior manager.
3. First sentence is recommendation toeither
    Option A: build new plant in anothercountry
    Option B: expand product line
4. Support your recommendation withfacts based on your Excel calculations.
                  Refer to computations in Excel file provided as attachment.
5. Close email with summary statementand sign-off appropriate for business.

Use good business writing – subject line should be short andinformative, body is concise,
                                 conclusion restates primary points. See rubric fordetails.

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As per rules I am answering the first 4 subparts of thequestionThe cash See Answer

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Objective: Students demonstrate ability to1. Utilize several capital budgetingconcepts.2. Complete required calculations.3. Develop a written recommendation to senior management based onresulting data.Scenario: D & H Enterprises is considering building a newplant overseas or expanding their product line. Cost will be $3,500 million for either option. Discount rate forboth projects is 11%. Cash inflows for each options are below. Shownin millions:YearOption A: Build NewOption B: Expand Line1$ 1000$ 500215001500330003500440004000Directions: Utilizing cell references and formulas, use the datain the Excel file provided to prepare A. Calculations – use the tabs provided fordetails of calculations – move final values tosummary tab using cell references.1. Payback periodcalculation. Textbook page 384 has example. You need touse Excel to make your calculations. 2. Net Present Value – work the process step-by-step then utilizethe NPV formula under the Formulas,Financials, tab. *See Table 12.4 in text page 386 for example. Note: you will becalculating the NPV using the two methods shown on Table12.4. Assume 11% as discount rate. 3. Internal Rate of Return and Modified Internal Rate of Return –utilize the IRR and MIRR formulas under theFormulas, Financial, tab in Excel. *See Table 12.5 in text page388 for example.Assume 4% as the reinvestment rate. B. Compose an email to senior management of D & H Enterprises(same format as Special Problem #1)…1. Subject line states main purpose ofemail2. Open email with salutation to yoursenior manager.3. First sentence is recommendation toeither Option A: build new plant in anothercountry Option B: expand product line4. Support your recommendation withfacts based on your Excel calculations. Refer to computations in Excel file provided as attachment.5. Close email with summary statementand sign-off appropriate for business. Use good business writing – subject line should be short andinformative, body is concise, conclusion restates primary points. See rubric fordetails.

Year	Option A: Build New	Option B: Expand Line
1	$ 1000	$ 500
2	1500	1500
3	3000	3500
4	4000	4000