Using the Payback Method, IRR, and NPV Word Document No Plagiarism and Excel Calculations

Anonymous

Question Description

I am currently in a graduate "corporate finance" class that I am taking and would appreciate some help on the following word document research that has to be formatted as a memo report, including calculations done on Excel, to management consisting of 350 words or more, excluding cover and reference page wording and no plagiarism. Here are the following assignment details:

Purpose of Assignment

The purpose of this assignment is to allow the student to calculate the project cash flow using net present value (NPV), internal rate of return (IRR), and the payback methods.

Assignment Steps

Resources: Corporate Finance

Create a 350-words or more memo to management including the following:

  • Introduction
  • Describe the use of internal rate of return (IRR), net present value (NPV), and the payback method in evaluating project cash flows.
  • Describe the advantages and disadvantages of each method.
  • Conclusion
  • Side Note: Also, include answers to questions detailed below for the calculations in the memo report).

Calculate the following time value of money problems: (Excel Spreadsheet Calculations, please show step-by-step on how to obtain these calculations):

  1. If you want to accumulate $500,000 in 20 years, how much do you need to deposit today that pays an interest rate of 15%?
  2. What is the future value if you plan to invest $200,000 for 5 years and the interest rate is 5%?
  3. What is the interest rate for an initial investment of $100,000 to grow to $300,000 in 10 years?
  4. If your company purchases an annuity that will pay $50,000/year for 10 years at a 11% discount rate, what is the value of the annuity on the purchase date if the first annuity payment is made on the date of purchase?
  5. What is the rate of return required to accumulate $400,000 if you invest $10,000 per year for 20 years. Assume all payments are made at the end of the period.

Calculate the project cash flow generated for Project A and Project B using the NPV method. (Excel Spreadsheet Calculations, please show step-by-step on how to obtain these calculations):

  • Which project would you select, and why?
  • Which project would you select under the payback method? The discount rate is 10% for both projects.
  • Use Microsoft® Excel® to prepare your answer.
  • Sample Template for Project A and Project B:

Show all work.

Submit the memo and all calculations

For word document, include APA formatting for references and citations, also include direct web link sources of where information is cited from in memo to the management team. No Plagiarism!

Tutor Answer

Professor_Jean
School: UIUC

Please see attachments and if you want me to revise anything, just leave me a message okay :)few seconds ago

1

Given,
Future Value
Time
Interest rate
Present Value

2

3

5

$200,000
5 Years
5%

Future Value

$255,256

Given,
Present Value
Time
Future Value

$100,000
10 Years
$300,000

Given,
Annual Payment
Time
Discount rate

11.61%

$50,000
10 Years
11%

Value of annuity on the purchase date

$326,852

Given,
Future Value
Annual investment
Time

$400,000
$10,000
20 years

Rate of return

6

$30,550

Given,
Present Value
Time
Interest rate

Interest rate
4

$500,000
20 Years
15%

6.77%

Given,
Project A
Project B
Cumulative Inflow A
Cumulative Inflow B
Discount Rate
Net Present Value

Initial Investment Year 1
Year 2
-10,000
5,000
5,0...

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Review

Anonymous
Solid work, thanks.

Anonymous
The tutor was great. I’m satisfied with the service.

Anonymous
Goes above and beyond expectations !

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