how all work to estimate your answer in the Excel tab for this and all related questions. With the growing market for healthy chocolate, Endanged Species decided to launch a new, environmentally friendly line of chocolate whose proceeds would contribute to native habitat restoration for endaged animals. In their initial market expansion they decided to focus on a caramel and hot pepper line that marketing studies indicated were widely desired. They secured a five-year contract to sell their entire production run of 275,000 units of the hot-pepper caramels in each of the five years to a national airline. Production of these speciality chocolates will require $285,000 in net working capital to start. Total fixed costs are $325,000 per year, variable production costs are $3.75 per unit, and the units are priced at $5.75 each. Cost inflation after the first year is forecast to average 8 percent each year but their contract only allows price price increases of 5 percent annually. The equipment needed to begin production will cost $480,000 and will be depreciated using the straight-line method over a 5-year life. No salvage value is expected. The tax rate is 21 percent and the required rate of return is 13 percent. What is the NPV of this project? In the field specified below provide your answer to the following question: What is the NPV of the project? For any credit, show all work in your Excel worksheet. In a new Excel worksheet, a) Answer the questions below and b) Place the company name at the top of the page. c) Use this information above to answer the following five questions. Show all inputs and steps that you used to arrive at your answers. Label each answer according to the question #. ie indicate clearly on your worksheet which section and input answers Question 1, Question 2, etc. Question 1: What is the initial outlay for the project? Question 2: What is the operating cash flow for each year of the project? Question 3: What is the amount of the terminal value (ie not including the operating cash flow) that occurs in the last year of the project life? Question 4: What is the NPV and MIRR of the project? Question 5: Use Goal Seek to estimate the cost inflation rate that causes NPV to equal zero, all else held at the original input levels. Based upon the results, is this project risky as it relates to inflation? Explain. SHOW ME HOW TO IT IN EXCEL AND THE FUNCTION USED.
Show all work to estimate your answer in the Excel tab for this and all related questions.
With the growing market for healthy chocolate, Endanged Species decided to launch a new, environmentally friendly line of chocolate whose proceeds would contribute to native habitat restoration for endaged animals. In their initial market expansion they decided to focus on a caramel and hot pepper line that marketing studies indicated were widely desired. They secured a five-year contract to sell their entire production run of 275,000 units of the hot-pepper caramels in each of the five years to a national airline. Production of these speciality chocolates will require $285,000 in net working capital to start. Total fixed costs are $325,000 per year, variable production costs are $3.75 per unit, and the units are priced at $5.75 each. Cost inflation after the first year is
In the field specified below provide your answer to the following question:
What is the NPV of the project?
For any credit, show all work in your Excel worksheet.
In a new Excel worksheet,
a) Answer the questions below and
b) Place the company name at the top of the page.
c) Use this information above to answer the following five questions.
Show all inputs and steps that you used to arrive at your answers. Label each answer according to the question #. ie indicate clearly on your worksheet which section and input answers Question 1, Question 2, etc.
Question 1: What is the initial outlay for the project?
Question 2: What is the operating cash flow for each year of the project?
Question 3: What is the amount of the terminal value (ie not including the operating cash flow) that occurs in the last year of the project life?
Question 4: What is the NPV and MIRR of the project?
Question 5: Use Goal Seek to estimate the cost inflation rate that causes NPV to equal zero, all else held at the original input levels. Based upon the results, is this project risky as it relates to inflation? Explain.
SHOW ME HOW TO IT IN EXCEL AND THE FUNCTION USED.
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