# Very easy NPV realted work.

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Can anyone explain slides 5,6,7 & Do a summary of results with speaking notes at the bottom

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Under Armour, Inc. Capital Budgeting Analysis Executive Briefing Students: Hal Stein and Olivia Blankenship Keller Graduate School of Management FI515 – Managerial Finance Professor: Gene Smith Date: February 16, 2017 Version 1.0 Draft Agenda Students: Hal Stein and Olivia Blankenship Keller Graduate School of Management FI515 – Managerial Finance Date: February 16, 2017 Version 1.0 Draft • Cost of Project Calculations – Analysis • Cash Flow Estimations – EBIT ( 12 years) – Analysis • Capital Budgeting – Net Present Value – Internal Rate of Return – Discounted Payback Period • Summary • References Page 2 of 12 Property Plant & Equipment property plant and equipment value of new PPE annual depreciation book value changes after 10% investment 538,531 592384.1 53,853 4263.370417 Straight line depreciation provide for depreciation charged to an asset evenly throughout its useful life. Depreciation per annum= (cost-residual value) Useful life Rate of depreciation= 1 *100% Useful Life Financial Data Students: Hal Stein and Olivia Blankenship Keller Graduate School of Management FI515 – Managerial Finance Date: February 16, 2017 Version 1.0 Draft Estimation of Free Cash Flows 1 2 3 4 EBIT 9693.54 EBITDA= Net Income+ interest+ depreciation+ amortization 60853.89 Calculation of the CFO CFO=Net Income+ depreciation+ amortization+ other non-cash charges(income)-Increase in net work 155790.4 calculating the net working capital Net Working capital= Current assets-current Liabilities 1019953 free cash flow FCF=CFO-capital expenditures necessary to maintain current growth 101937.4 The FCF provides a representation of the financial flexibility of the company. This means that the organization is able to take advantage of different investments that are above the planned investments. Note: Source data taken from Yahoo Finance (n.d.). Page 7 of 12 Project Effectiveness Net Present Value NPV year total initial outlay Students: Hal Stein and Olivia Blankenship Keller Graduate School of Management FI515 – Managerial Finance Date: February 16, 2017 Version 1.0 Draft discounting 1 45638.13559 2 38676.3861 3 32776.59839 4 27776.77829 5 23539.64262 6 19948.84968 7 16905.80481 8 14326.95323 9 12141.48579 10 10289.39474 11 8719.826048 12 7389.683092 258129.5384 -53,853 Page 8 of 12 Project Effectiveness Internal Rate of Return IRR year 𝑇 discounting reducing the NPV 0 -53853 -53853 1 45638.13559 33658.125 2 38676.3861 21036.32813 3 32776.59839 13147.70508 4 27776.77829 8217.315674 5 23539.64262 5135.822296 6 19948.84968 3209.888935 7 16905.80481 2006.180584 8 14326.95323 1253.862865 9 12141.48579 783.6642908 10 10289.39474 489.7901817 11 8719.826048 306.1188636 12 7389.683092 191.3242897 Students: Hal Stein and Olivia Blankenship Keller Graduate School of Management FI515 – Managerial Finance Date: February 16, 2017 Version 1.0 Draft -53853 28343.68421 14917.72853 7851.436069 4132.334773 2174.913039 1144.691073 602.4689858 317.0889399 166.8889157 87.83627143 46.22961654 24.33137713 Note: Source data taken from S&P 500 (2017). 𝑁𝑃𝑉 = ෍ 𝑡−1 𝐶𝑡 1+𝑟 𝑡 − 𝐶𝑜 where: Ct = net cash inflow during the period t Co= total initial investment costs r = discount rate, and t = number of time periods Using this formula IRR ≈ 90% Page 9 of 12 Project Effectiveness Discounted Payback Period Discounted payback period year discounting 0 -53,853 -53,853 1 45638.13559 2 38676.3861 84314.52169 3 32776.59839 4 27776.77829 5 23539.64262 6 19948.84968 7 16905.80481 8 14326.95323 9 12141.48579 10 10289.39474 11 8719.826048 12 7389.683092 total 204,277 Students: Hal Stein and Olivia Blankenship Keller Graduate School of Management FI515 – Managerial Finance Date: February 1262017 Version 1.0 Draft The project provides a payment of the total initial investment on the second year of it operations providing a surplus of 30,462 on the same year 30,462 Page 10 of 12 Summary Students: Hal Stein and Olivia Blankenship Keller Graduate School of Management FI515 – Managerial Finance Date: February 16, 2017 Version 1.0 FINAL Validity of Results Page 11 of 12 References Students: Hal Stein and Olivia Blankenship Keller Graduate School of Management FI515 – Managerial Finance Date: February 12, 2017 Version 1.0 FINAL Morningstar, Inc. (2017). Morningstar. Under Armour Inc A (UAA). Retrieved February 8, 2017, from http://quicktake.morningstar.com/StockNet/bonds.aspx?Sym bol=UAA&Country=USA Page 12 of 12
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Here we go..😗 Remember to rate me. Also, in case you need further explanation kindly ask. Best regards, Craig

Under Armour, Inc.
Capital Budgeting Analysis
Executive Briefing

Students: Hal Stein and Olivia Blankenship
FI515 – Managerial Finance
Professor: Gene Smith
Date: February 16, 2017
Version 1.0 Draft

Agenda

Students: Hal Stein and Olivia Blankenship
FI515 – Managerial Finance
Date: February 16, 2017
Version 1.0 Draft

• Cost of Project Calculations
– Analysis

• Cash Flow Estimations
– EBIT ( 12 years)
– Analysis

• Capital Budgeting
– Net Present Value
– Internal Rate of Return
– Discounted Payback Period

• Summary
• References

Page 2 of 12

Property Plant & Equipment
property plant and equipment
value of new PPE
annual depreciation

book value
changes after 10% investment
538,531
592384.1
53,853
4263.37...

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