Use Excel to solve the following problem. Assume that as a local government financial analyst you are asked to project the feasibility of a loan to a proposed public service venture for its start-up funding. The venture’s principals estimate that, at the end of 5 years, they will be able to pay back up to $800,000 from revenues accruing to the venture’s activities. Assuming that your organization’s current “average cost of capital” is 4.8% (the “discount rate”). Assuming monthly compounding, what is the maximum amount your government can commit to the venture for its start-up? (I have worked this problem out on my own, I just want to be sure I used the correct formulas.)

Following is information on two alternative investments. Beachside Resort is considering building a new pool or spa. The company requires a 10% return from its investments. Initial investment Net cash flows in: Year 1 40,000 Year 2 56,000 Year 3 80,295 Year 4 90,400 Year 5 65,000 Compute the internal rate of return for each of the projects using excel functions. (Round your answers to 2 decimal places.) Pool Spa IRR Pool Spa $ (160,000) $ (105,000) % % 32,000 50,000 66,000 72,000 24,000

After analysing the financial data of Q-Constructions, you notice that they are trending in the right direction. A new 12-month construction proposal has come to the company worth $1,000,000 and an important question is whether it will be financially viable. They want you to analyse the proposal, in particular, the recommended cash flow schedule and to understand the key financial points during the construction project. The following cash flow schedule is summarised below. To ensure that all upfront and on-going outlay costs are covered in advance, Q-Constructions incur an initial start-up cost of $200,000. The proposal states that they will receive a deposit from the client of 10% of the total project price at the beginning. They then receive four equal instalment payments of 20% of the total project price associated to project milestones from the client at the end of the 2nd, 6th, 8th and 10th month. Finally, they receive the last 10% project milestone on lock-up which occurs at the…

The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is "looking up." As a result, the cemetery project will provide a net cash inflow of $94,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 3 percent per year forever. The project requires an initial investment of $1,470,000. a-1. What is the NPV for the project if the company's required return is 12 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV a- If the company requires a return of 12 percent on such undertakings, should the 2. cemetery business be started? No O Yes b. The company is somewhat unsure about the assumption of a growth rate of 3 percent in its cash flows. At what constant growth rate would the company just break even if it still required a return of 12 percent on investment? (Do not round…

Hassle-Free Web is bidding to provide web hosting services for Hotel Lisbon. Hotel Lisbon pays its current provider $10,100 per year for hosting its web page, handling transactions, etc. Hassle-Free figures that it will need to purchase equipment worth $15,100 up front and then spend $2,000 per year on monitoring, updates, and bandwidth to provide the service for 3 years. If Hassle-Free's cost of capital is 10.3 %, can it bid less than $10,100 per year to provide the service and still increase its value by doing so? Hassle-Free can bid as low as $?

Consider how Root Valley River Park Lodge could use capital budgeting to decide whether the $13,000,000 River Park Lodge expansion would be a good investment. Assume Root Valley's managers developed the following estimates concerning the expansion: (Click the icon to view the estimates.) (Click the icon to view additional information.) The internal rate of return (IRR) of the expansion is Data table More info example 10-12% Number of additional skiers per day Average number of days per year that weather conditions allow skiing at Root Valley Useful life of expansion (in years) Average cash spent by each skier per day Average variable cost of serving each skier per day Cost of expansion Discount rate Get more help. 12-14% Print 15-16% 16-18% S Done 122 skiers 149 days Assume that Root Valley uses the straight-line depreciation method and expects the lodge expansion to have no residual value at the end of its nine-year life. The project is expected to have an average annual net cash…

Greater Findlay Development Consortium is preparing to open a new retail strip mall and have multiple businesses that would like lease space in it.  Each business will pay a fixed amount of rent plus a percentage of the gross sales generated each year.  The cash flows from each of the businesses has approximately the same amount of risk.  The business names, annual expected cash flows, and initial capital outflow for each of the businesses that would like to lease space in the strip mall are provided below. Greater Findlay Development Consortium uses a 12% hurdle rate which is its cost of capital. All business will be evaluated based on 4-year term because the contract will expire in four years.    Video Now Apple Garden Croger Mart Horizon Wireless Initial Capital Outlay ($200,000) ($298,000) ($248,000) ($272,000)           Annual Net Cash Flows         Year 1                           65,000                        100,000                           80,000…

You are the financial manager of the firm LAB.inc which does research in the medical field, your company needs an estimate of a financing plan for a research project. The research project according to the evaluation of the experts will be spread over a period of 4 years. The annual funding required to conduct this research is $100,000 at the beginning of each year. The firm has set a term of 7 years to raise the necessary funds to finance this research, the nominal interest rate is 8% capitalized quarterly. 1. How much does the company need to save at the end of each month to fund this research in 7 years? 2. Draw the timeline for this financing plan by presenting all the relevant elements. If the firm wants to start financing the research project today t=0, by taking out a bank loan equal to the VA of all the financing needs of the research project (for the 4 years). 3. Calculate the amount of monthly payments that the firm must pay to repay this bank loan for a period of 5 years?

1. A consulting firm is considering the purchase of a new computer system for their enterprise management needs. A vendor has quoted a purchase price of $240,000. The consulting firm plans to borrow one-fourth of the purchase price from a bank at 8% compounded annually. The loan is to be repaid in equal annual payments over a six year period. The remainder of the purchase price is available through other funding sources (e.g. not a loan or money that must be repaid). The time. computer system is expected to last eight years and has a salvage value of $8,000 at that During the 8-year period, the consultant firm also expects to pay a technician $25,000 per year to maintain the system but will also save an estimated $55,000 per year through increased efficiencies in operations. The consulting firm project manager has determined that a MARR of 12%/year should be used to evaluate this investment project. What is the external rate of return for the investment project? Should the new computer…

I need help solving this problem below on excel.  Suppose you purchased equipment and agreed to pay the manufacturer $100,000 in 4 years for the equipment. What should you record the cost of the equipment today if your cost of capital is 5%?