Complete the seven questions at the end of the case utilizing both an Excel spreadsheet and Word document. Here are some additional instructions related to each of the questions in the case.
Question 1: Set up Table 1 in an Excel spreadsheet and add the figures for years 4 and 5 to the table (make sure to include the salvage values in year 5).
Question 2: Utilize the table you set up in question 1 to calculate the payback, NPV, and IRR. Within a Word document, briefly explain the results for each measure.
Question 3: Answer this question in the same Word document you used for question 2.
Question 4: Answer this question in the same Word document you used for questions 2 and 3.
Question 5: The only part of this question you need to complete is the best case scenario NPV and worst case scenario NPV. In order to do that, set up a table as you did in question 1 for each scenario, and then calculate the NPV below each table (best case scenario is volume of 25 per day and salvage value of $7,000,000; worst case scenario is volume of 15 per day and salvage value of $3,000,000--remember that revenue and any variable expenses will adjust based on the volume).
Question 6: Use the table you completed in question 1 and change your cost of capital to calculate the high risk NPV.
Question 7: Answer this question in the same Word document you used for questions 2, 3, and 4.
|Due By (Pacific Time)
||05/19/2015 10:00 pm