Professional Documents
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Month
January
February
March
April
May
June
July
August
September
October
November
December
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Units Sold
834
1,132
1,243
1,094
902
1,543
1,654
2,123
1,566
1,434
1,321
1,654
Budget
300
300
300
350
350
350
500
500
500
500
500
500
Chart
Actual
311
298
305
351
402
409
421
454
474
521
476
487
Pct. Diff
Under Budget
Exceeded Budget
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
a. The companys sales for 2011 were 455,150, and EBITDA was 15 percen
Further, depreciation amounted to 11% of net fixed assets, interest charge
corporate tax rate was 32%, and Timberland pays 40% of its net income
out in dividends. Given this information, construct Timberlandland's 20
All figures above are in thousands also.
The input information required for the problem is outlined in the "Key Input Da
this data and the balance sheet above, we constructed the income statement show
Sales
Expenses excluding depreciation and amortization
EBITDA
Depreciation (no amortization charges)
EBIT
Interest Expense
EBT
Taxes (40%)
Net Income
Common dividends
Addition to retained earnings
b. Next, construct the firms statement of retained earnings for the year en
then its 2011 statement of cash flows.
Statement of Retained Earnings
(in thousands)
Retained Earnings, Jan 1, 2011
Add: Net Income
Total
Less: Common Dividends
c. Calculate net operating working capital, total net operating capital, net o
NOPAT
Net investment in operating capita
36,531
47,381.00
(10,850)
d. Calculate the firms EVA and MVA for 2011. Assume that Laiho had 10
the year-end closing stock price was 17.25 per share, and its after-tax cos
Additional Input Data
Stock price
# of shares (in thousands)
A-T cost of capital
Market Value Added
MVA =
=
Stock price
=
17.25
14,895
Economic Value Added
EVA =
=
NOPAT
=
36,531
17.25
10,000
12%
x
x
# of shares
10,000.00
Operating Capital
239,186
7,828
2011
2010
91,450
11,400
103,365
38,444
244,659
67,165
311,824
74,625
15,100
85,527
34,982
210,234
42,436
252,670
30,761
30,477
16,717
77,955
76,264
154,219
100,000
57,605
157,605
311,824
23,109
22,656
14,217
59,982
63,914
123,896
90,000
38,774
128,774
252,670
16,825
(3,700)
17,838
3,462
34,425
24,729
59,154
0
0
7,652
7,821
2,500
17,973
12,350
30,323
10,000
18,831
28,831
59,154
NIAT
Deprc
Operating
31,386
7,388
(17,838)
(3,462)
7,652
7,821
32,947
455,150
15%
11%
40%
8,575
40%
2011
455,150
386,878
68,273
7,388
60,884
8,575
52,309
20,924
31,386
2010
364,120
321,109
43,011
6,752
36,259
7,829
28,430
11,372
17,058
12,554
18,831
6,823
10,235
``
38,774
31,386
70,160
12,554
$5,145
$3,430
$8,575
57,605
31,386
7,388
38,774
(17,838)
(3,462)
7,652
7,821
32,947
(32,117)
3,700
2,500
10,000
12,350
(12,554)
15,995
16,825
74,625
91,450
NIAT
er all investments made to Operations- via dividends, T/S, Interest, Principal, Inv. In Non -
apital
Investing
Financing
-12,554
3,700
(32,117)
2,500
12,350
10,000
(32,117)
15,995
16,825
16,825
0
2009
400,000.00
344,000.00
56,000.00
11,678.70
44,321.30
17,728.52
26,592.78
2010
420,000.00
361,994.20
58,005.80
12,262.80
45,743.00
18,297.20
27,445.80
Dividends
Addition to retained earnings
21,200.00
5,392.78
22,300.00
5,145.80
2009
162,000.00
162,000.00
199,000.00
361,000.00
2010
168,000.00
168,000.00
210,042.00
378,042.00
57,911.50
57,911.50
136,253.00
194,164.50
166,835.50
361,000.00
62,999.70
62,999.70
143,061.00
206,060.70
171,981.30
378,042.00
Other Data
Tax rate
Expected growth rate
Weighted average cost of capital (WACC)
Number of shares of stock (000)
FCF Valuation
NOPAT
Operating CA
Operating CL
NOWC
Net PPE
Total net operating capital
40%
40%
2009
33,600.00
162,000.00
57,911.50
104,088.50
199,000.00
303,088.50
2010
34,803.48
168,000.00
62,999.70
105,000.30
210,042.00
315,042.30
Investment in capital
ROIC (beginning capital)
FCF
FCF
Value of operations
Plus the value of non-operating assets
Total value of the corporation
Minus value of debt
Value of equity
Price per share
EVA
EVA based on ROIC
11,953.80
11.48%
22,849.68
2011
441,000.00
374,881.60
66,118.40
12,875.50
53,242.90
21,297.16
31,945.74
23,400.00
8,545.74
2011
176,400.00
176,400.00
220,500.00
396,900.00
66,150.00
66,150.00
150,223.00
216,373.00
180,527.04
396,900.04
40%
5.00%
10.02%
10,000
2011
39,671.04
176,400.00
66,150.00
110,250.00
220,500.00
330,750.00
5.02%
501225.2
gordon model
Strategic planning is one of the core functions of an organization, and it involves the coordination of
plans with financial plans. While operational plans outline how the firm intends to reach its corpora
financial plans outline the manner in which the firm will obtain the necessary productive assets to o
Financial planning generally begins with a sales forecast, and that forecast generally starts with a re
firm's recent history. Here are XYZ Co sales over the past 5 years:
2007
2008
2009
2010
2011
Sales
2,058
2,534
2,472
2,850
3,000
Average =
Annual Growth
Rate
23.1%
-2.4%
15.3%
5.3%
10.3%
The first step in a sales forecast are several ways to estimate the historical growth rate, ranging from
simplest are to estimate the average annual growth rate and the compound annual growth rate.
Average annual growth rate =
Compound annual growth rate =
10.3%
The chart shows the regression line. If you actually want the regression intercept and slope, the easi
Wizard to create the INTERCEPT and SLOPE functions, as shown below.
Intercept =
-439,397
Slope =
220
You could always use the estimated interecept and slope to project the future sales, but an even easie
function. This allows you to specify the past years and sales, and then specify a projected year. It th
you the projected value. See below for details.
2011
The compound growth rate is very sensitive to the particular starting and ending dates that are chos
Management started with the regression prediction, then modified it based on qualitative data to
3,300, the forecasted value given in the text. Management's sales forecast represents a growth rate o
We examine a forecasting method for a firm using the percentage of sales of method. This forecastin
on the financial statements are proportional to sales. In particular, it assumes that the following item
Costs; (2) Cash (i.e., the company needs a certain amount of cash on hand, since it does not know ex
deposits will clear the bank); (3) Accounts receivable (the proportion will depend on the firm's credi
plant and equipment (this is reasonable for the long-term; in the short-term, firm's often have exces
this model); (6) Accounts payable; and (7) Accruals. It also assumes that Depreciation is proportion
Other items on the financial statements are a direct result of the firm's financial policies (i.e., divide
policy), which we discuss below.
The next step is to analyze the historical "Pro Forma" ratios. The actual historical statements are
the Pro Forma analysis are shown below the actual statements.
INCOME STATEMENT
(in thousands)
Sales
Costs except depreciation
Depreciation
Total operating costs
EBIT
Less Interest
Earnings before taxes (EBT)
Taxes (40%)
NI before preferred dividends
Preferred dividends
NI available to common
Dividends to common
Add. to retained earnings (DRE)
Shares of common equity
Dividends per share
Price per share
2010
2011
2,850.0
2,497.0
90.0
2,587.0
263.0
60.0
203.0
81.2
121.8
4.0
117.8
3,000.0
2,616.2
100.0
2,716.2
283.8
88.0
195.8
78.3
117.5
4.0
113.5
53.0
64.8
57.5
56.0
50
1.06
26.00
50
1.15
23.00
2010
2011
15.0
65.0
315.0
415.0
810.0
870.0
1,680.0
10.0
0.0
375.0
615.0
1,000.0
1,000.0
2,000.0
2010
2011
30.0
130.0
60.0
220.0
60.0
140.0
110.0
310.0
BALANCE SHEET
(in thousands)
Assets
Cash
ST Investments
Accounts receivable
Inventories
Total current assets
Net plant and equipment
Total assets
Long-term bonds
Total liabilities
Preferred stock
Common stock
Retained earnings
Total common equity
Total liabilities and equity
580.0
800.0
40.0
130.0
710.0
840.0
1,680.0
Costs / Sales
Depreciation / Net plant & equip.
Cash / Sales
Accounts Rec. / Sales
Inventory / Sales
Net plant & equip. / sales
Accounts Pay. / Sales
Accruals / Sales
Long-term bonds/operating assets
754.0
1,064.0
40.0
130.0
766.0
896.0
2,000.0
Actual
2010
2011
87.6%
10.3%
0.5%
11.1%
14.6%
30.5%
1.1%
4.6%
35.9%
87.2%
10.0%
0.3%
12.5%
20.5%
33.3%
2.0%
4.7%
37.7%
8.
9.
10.
11.
Taxes (40%)
NI before preferred dividends
Preferred dividends
NI available to common
12.
13.
14.
15.
78.3
117.5
4.0
113.5
50.0
1.2
57.5
56.0
8%
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
60.0
140.0
110.0
310.0
754.0
1,064.0
40.0
130.0
766.0
896.0
2,000.0
2.00%
4.67%
carry over from 2011
carry over from 2011
carry over from 2011
carry over from 2011
addition to RE
a
19. Required assets
b
20. Specified sources of financing
21. Additional funds needed (AFN)
Amount (000)
Notes Payable
Long-term bonds
Preferred Stock
Common Stock
25%
25%
0%
50%
100%
27.9
27.9
0.0
55.7
111.4
Required assets include all forecasted operating assets plus the short-term investments fro
3,500
y = 220x - 439397
R = 0.9038
3,000
2,500
23.1%
-2.4%
15.3%
5.3%
10.3%
2058.00
2261.33
2484.75
2730.25
3000.00
203.33
223.42
245.50
269.75
2,000
1,500
1,000
500
cal growth rate, ranging from the simple to the complicated. The0
und annual growth rate.
2006
2007
2008
2009
2010
2011
2012
EPT function)
SALES
EQUATION
SALES = 220 YEAR - 439397
SLOPE
2012
2013
2014
220 INTERCEPT
-439397
3243
3463
3683
3243
3463
3683
nd ending dates that are chosen. One way to smooth this out is to
ual historical statements are shown below. The ratios needed for
below the actual statements.
Percentage of Sales Method
Common Size statements
2010
2011
100.00%
87.61%
3.16%
90.77%
9.23%
2.11%
7.12%
2.85%
4.27%
0.14%
4.13%
100.00%
87.21%
3.33%
90.54%
9.46%
2.93%
6.53%
2.61%
3.92%
0.13%
3.78%
2011
0.9%
3.9%
18.8%
24.7%
48.2%
51.8%
100.0%
0.5%
0.0%
18.8%
30.8%
50.0%
50.0%
100.0%
2010
2011
1.8%
7.7%
3.6%
13.1%
3.0%
7.0%
5.5%
15.5%
34.5%
47.6%
2.4%
7.7%
42.3%
50.0%
100.0%
Historical
Average
87.4%
10.2%
0.4%
11.8%
17.5%
31.9%
1.5%
4.6%
36.8%
37.7%
53.2%
2.0%
6.5%
38.3%
44.8%
100.0%
87.2%
10.0%
0.3%
12.5%
20.5%
33.3%
2.0%
4.7%
37.7%
10%
40%
8%
8%
10%
10%
23
Forecast
Adjustments
Final Forecast
2012
2011 sales
3,300
2012 sales
2,878
2012 net plant & equipt110
2,988
312
rry over from 2011
88
224
3,300.0
2,877.6
110.0
2,987.6
312.4
90
135
4
131
50.0
1.2
62.1
68.54
2011 Dividends
Forecast
Adjustments
Final Forecast
2012
2012 sales
rry over from 2011
2012 sales
2012 sales
2012 sales
2012 sales
2012 sales
rry over from 2011
11.0
0.0
412.5
676.5
1,100.0
1,100.0
2,200.0
11.0
0.0
412.5
676.5
1100.0
1100.0
2200.0
66.0
154.0
110.0
330.0
754.0
1,084.0
40.0
130.0
834.5
964.5
2,088.5
66.0
154.0
137.9
357.9
781.9
1139.7
40.0
185.7
834.5
1020.3
2200.0
2,200.0
2,088.5
111.4
Interest rate
27.9
27.9
55.7
8%
10%
`
Series1
Linear (Series1)
Linear (Series1)
2012
INCOME STATEMENT
(in thousands)
Sales
Costs except depreciation
Depreciation
Total operating costs
EBIT
Less Interest
Earnings before taxes (EBT)
Taxes (40%)
NI before preferred dividends
Preferred dividends
NI available to common
Dividends to common
Add. to retained earnings (DRE)
Shares of common equity
Dividends per share
Price per share
2010
2,850.00
2,497.00
90.00
2,587.00
263.00
60.00
203.00
81.20
121.80
4.00
117.80
53.00
64.80
50
1.1
26.0
BALANCE SHEET
(in thousands)
2010
Assets
Cash
ST Investments
Accounts receivable
Inventories
Total current assets
Net plant and equipment
Total assets
15.0
65.0
315.0
415.0
810.0
870.0
1,680.0
2010
Accounts payable
Accruals
Notes payable
Total current liabilities
Long-term bonds
Total liabilities
Preferred stock
Common stock
Retained earnings
Total common equity
Total liabilities and equity
30.0
130.0
60.0
220.0
580.0
800.0
40.0
130.0
710.0
840.0
1,680.0
Actual
2010
Costs / Sales
Depreciation / Net plant & equip.
Cash / Sales
Accounts Rec. / Sales
Inventory / Sales
Net plant & equip. / sales
Accounts Pay. / Sales
Accruals / Sales
Long-term bonds/operating assets
87.6%
10.3%
0.5%
11.1%
14.6%
30.5%
1.1%
4.6%
35.9%
Other Inputs
Sales Growth Rate
Tax rate
Dividend growth rate
Interest rate on notes payable and short-term investments
Interest rate on long-term bonds
Coupon rate on preferred stock
Funds raised as notes payable
Funds raised as long-term debt
Funds raised as preferred stock
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Sales
Costs except depreciation
Depreciation
Total operating costs
EBIT
Less Interest
Earnings before taxes (EBT)
Taxes (40%)
NI before preferred dividends
Preferred dividends
NI available to common
12.
13.
14.
15.
Actual
2011
(1)
3,000.0
2,616.2
100.0
2,716.2
283.8
88.0
195.8
78.3
117.5
4.0
113.5
50.0
1.2
57.5
56.0
MicroDrive, Inc.: Actual and First Pass Projected Balance Sheets (Thousands)
Actual
2011
(1)
1.
2.
3.
4.
Assets
Cash
ST investments
Accounts receivable
Inventories
10.0
0.0
375.0
615.0
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
1,000.0
1,000.0
2,000.0
60.0
140.0
110.0
310.0
754.0
1,064.0
40.0
130.0
766.0
896.0
2,000.0
Note: if the AFN is negative, then the firm has more than it needs to finance the assets. It coul
by paying off debt, buying back stock, or paying a larger dividend. Instead, we assume the fir
funds to purchase additional short-term investments.
New short-term investments =
56.9
Stock price =
# new shares issued =
$23.00
2.473
2011
3,000.00
2,616.20
100.00
2,716.20
283.80
88.00
195.80
78.32
117.48
4.00
113.48
100.00%
87.61%
87.21%
3.16%
3.33%
90.77%
90.54%
9.23%
9.46%
2.11%
2.93%
7.12%
6.53%
2.85%
2.61%
4.27%
3.92%
0.14%
4.13%
0.13%
3.78%
57.50
55.98
50
1.2
23.0
Common size statements
2011
2010
2011
10.0
0.0
375.0
615.0
1,000.0
1,000.0
2,000.0
0.9%
3.9%
18.8%
24.7%
48.2%
51.8%
100.0%
0.5%
0.0%
18.8%
30.8%
50.0%
50.0%
100.0%
2011
2010
2011
60.0
140.0
110.0
310.0
754.0
1,064.0
40.0
130.0
766.0
896.0
2,000.0
Actual
nvestments
1.8%
7.7%
3.6%
13.1%
34.5%
47.6%
2.4%
7.7%
42.3%
50.0%
100.0%
2011
Historical
Average
Industry
Composite
87.2%
10.0%
0.3%
12.5%
20.5%
33.3%
2.0%
4.7%
37.7%
87.4%
10.2%
0.4%
11.8%
17.5%
31.9%
1.5%
4.6%
36.8%
87.1%
10.2%
1.0%
10.0%
11.1%
33.3%
1.0%
2.0%
30.9%
10%
40%
8%
8.0%
10.0%
10%
25%
25%
0%
3.0%
7.0%
5.5%
15.5%
37.7%
53.2%
2.0%
6.5%
38.3%
44.8%
100.0%
Preliminary
Forecast
2012
87.2%
10.0%
0.3%
12.5%
20.5%
33.3%
2.0%
4.7%
37.7%
50%
Forecast
Basis
(2)
10% 2011 Sales
87.2% 2012 sales
10% 2012 NPE
10% of average
8% 2011 DPS
Forecast
2012
(3)
3,300.00
2,877.60
110.00
2,987.60
312.40
86.76
225.64
90.26
135.38
4.00
131.38
52.47
1.24
65.17
66.21
ets (Thousands)
Forecast
(2)
Basis
Forecast
2,012.00
(3)
11.0
412.5
676.5
1,100.0
1,100.0
2,200.0
66.0
154.0
138.4
358.4
782.4
1,140.9
40.0
186.9
832.2
1,019.1
2,200.0
2,200.0
2,086.2
113.8
25%
25%
0%
50%
28.4
28.4
56.9
ABC has projected the following sales for the first eight months of 2012 as follows:
Jan
Feb
Mar
Apr
100,000
120,000
150,000
300,000
May
Jun
Jul
Aug
275,000
200,000
200,000
180,000
ABC collects 20% of sales in the month of the sale, 50% in the month following, and the remaining 30%,
two months following the sale. During November and December 2011, sales were 220,000 and 175,000 respect
ABC purchases raw materials two months in advance of its sales equal to 65% of its final sales. The supplier is p
one month after delivery. Thus purchases for April sales are made in February and payment made in March.
In addition, ABC pays 10,000 per month for rent and 20,000 each month for other expenditures. Tax prepaymen
22,500 are made each quarter beginning in March. The company's cash balance as of Dec 31, 2011 was 22,000.
A minimum balance of 20,000 must be maintained at all times to satisfy the bank's line of credit agreement.
ABC has arranged for a short term credit with its bank at an interest rate of 12% p.a. (1% per month) to be paid
Borrowing to meet estimated monthly cash needs takes place at the end of the month, and interest is not paid
end of the following month. Consequently, if the firm were to borrow 50,000 during the month of April, then it
500 in interest during May. Finally, ABC follows a policy of repaying its outstanding short-term debt in any mon
its cash balance exceeds the minimum cash balance of 20,000.
a) What will be the cash requirement for the next 6 months so that it can renegotiate the terms of a short-term
arrangement with its bank, if necessary. To evaluate the problem, ABC plans to evaluate the impact of a +/- 20%
in its monthly sales efforts. Prepare a 6-month cash budget and use it to evaluate the firm's cash requirements.
b) ABC has a note due in June. Will the firm have sufficient cash to repay the loan?
Jan
Feb
Mar
Apr
Collection
1st Month
2nd Month
3rd Month
May
Jun
Jul
Aug
Purchases disb
% of Sales
Interest rate
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Present Value
Years
Rate
Future Value (Formula)
Future Value (Excel Ftn)
15,000.00
2
12%
18,816.00
fv=pv(1+r)
(18,816.00)
Year
1
2
3
4
5
Interest Rate
Present Value
Future Value
Cash Flow
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
11.00%
10,319.90
(17,389.63)
PV
(900.90)
(1,623.24)
(2,193.57)
(2,634.92)
(2,967.26)
(10,319.90)
Investment
Simple Rate
Periods per Year
Term (Years)
Future Value
1,000,000.00
10.00%
2
1
($1,102,500.00)
Investment
Simple Rate
Periods per Year
Term (Years)
Future Value
1,000,000.00
10.00%
12
1
Weekly
Daily
Continuous
52
365
Infinite
1,105,064.79
1,105,155.78
1,105,170.92
UNCTIONS IN EXCEL:
AMORTIZATION SCHEDULE
Prepare a Monthly amortization schedule for a house loan from pag-ibig given the following data
LOAN AMORTIZATION SCHEDULE
Loan Principal
691,170.65
Annual rate of interest
10.0000%
Periods/year
12
Number of years
10
Monthly payment
9,133.87
Method 1
Month
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Interest
Principal
5,759.76
5,731.64
5,703.29
5,674.70
5,645.87
5,616.80
5,587.50
5,557.94
5,528.14
5,498.10
5,467.80
5,437.25
5,406.44
5,375.38
5,344.06
5,312.48
5,280.63
5,248.52
5,216.14
5,183.50
5,150.58
5,117.38
5,083.91
5,050.16
5,016.13
4,981.82
4,947.22
4,912.33
4,877.15
3,374.12
3,402.23
3,430.59
3,459.17
3,488.00
3,517.07
3,546.38
3,575.93
3,605.73
3,635.78
3,666.07
3,696.62
3,727.43
3,758.49
3,789.81
3,821.39
3,853.24
3,885.35
3,917.73
3,950.38
3,983.29
4,016.49
4,049.96
4,083.71
4,117.74
4,152.05
4,186.66
4,221.54
4,256.72
Year-end
Principal
691,170.65
687,796.53
684,394.30
680,963.72
677,504.54
674,016.54
670,499.48
666,953.10
663,377.17
659,771.44
656,135.67
652,469.59
648,772.97
645,045.54
641,287.05
637,497.24
633,675.84
629,822.60
625,937.25
622,019.53
618,069.15
614,085.86
610,069.37
606,019.41
601,935.70
597,817.96
593,665.90
589,479.25
585,257.70
581,000.98
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
4,841.67
4,805.91
4,769.84
4,733.47
4,696.80
4,659.83
4,622.54
4,584.95
4,547.04
4,508.82
4,470.28
4,431.41
4,392.23
4,352.71
4,312.87
4,272.69
4,232.18
4,191.34
4,150.15
4,108.62
4,066.74
4,024.51
3,981.94
3,939.00
3,895.71
3,852.06
3,808.05
3,763.67
3,718.91
3,673.79
3,628.29
3,582.41
3,536.15
3,489.50
3,442.46
3,395.03
3,347.21
3,298.99
3,250.36
3,201.33
3,151.90
3,102.05
3,051.78
3,001.10
4,292.20
4,327.96
4,364.03
4,400.40
4,437.07
4,474.04
4,511.33
4,548.92
4,586.83
4,625.05
4,663.59
4,702.46
4,741.65
4,781.16
4,821.00
4,861.18
4,901.69
4,942.53
4,983.72
5,025.25
5,067.13
5,109.36
5,151.93
5,194.87
5,238.16
5,281.81
5,325.82
5,370.21
5,414.96
5,460.08
5,505.58
5,551.46
5,597.72
5,644.37
5,691.41
5,738.84
5,786.66
5,834.88
5,883.51
5,932.54
5,981.97
6,031.82
6,082.09
6,132.77
576,708.78
572,380.82
568,016.79
563,616.39
559,179.32
554,705.28
550,193.95
545,645.03
541,058.20
536,433.15
531,769.56
527,067.10
522,325.45
517,544.29
512,723.29
507,862.11
502,960.43
498,017.89
493,034.17
488,008.92
482,941.79
477,832.43
472,680.50
467,485.63
462,247.47
456,965.66
451,639.84
446,269.63
440,854.68
435,394.60
429,889.01
424,337.55
418,739.83
413,095.45
407,404.04
401,665.21
395,878.55
390,043.66
384,160.15
378,227.62
372,245.64
366,213.82
360,131.73
353,998.96
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
2,949.99
2,898.46
2,846.50
2,794.10
2,741.27
2,688.00
2,634.28
2,580.12
2,525.51
2,470.44
2,414.91
2,358.92
2,302.46
2,245.53
2,188.13
2,130.25
2,071.88
2,013.03
1,953.69
1,893.86
1,833.52
1,772.69
1,711.34
1,649.49
1,587.12
1,524.23
1,460.82
1,396.87
1,332.40
1,267.39
1,201.83
1,135.73
1,069.08
1,001.88
934.11
865.78
796.88
727.40
657.35
586.71
515.48
443.66
371.25
298.22
6,183.88
6,235.41
6,287.37
6,339.77
6,392.60
6,445.87
6,499.59
6,553.75
6,608.37
6,663.43
6,718.96
6,774.95
6,831.41
6,888.34
6,945.74
7,003.63
7,061.99
7,120.84
7,180.18
7,240.01
7,300.35
7,361.18
7,422.53
7,484.38
7,546.75
7,609.64
7,673.05
7,737.00
7,801.47
7,866.48
7,932.04
7,998.14
8,064.79
8,132.00
8,199.76
8,268.09
8,336.99
8,406.47
8,476.52
8,547.16
8,618.39
8,690.21
8,762.63
8,835.65
347,815.08
341,579.67
335,292.29
328,952.52
322,559.92
316,114.05
309,614.46
303,060.71
296,452.35
289,788.91
283,069.95
276,295.00
269,463.58
262,575.24
255,629.50
248,625.87
241,563.88
234,443.04
227,262.87
220,022.85
212,722.50
205,361.32
197,938.79
190,454.41
182,907.66
175,298.02
167,624.97
159,887.97
152,086.50
144,220.02
136,287.98
128,289.84
120,225.05
112,093.06
103,893.29
95,625.20
87,288.21
78,881.74
70,405.21
61,858.05
53,239.66
44,549.46
35,786.83
26,951.18
118
119
120
224.59
150.35
75.49
8,909.28
8,983.52
9,058.38
18,041.91
9,058.38
0.00
286,750.63
261,281.64
he following data
Excel functions
-5,731.64
-3,885.35
-62,769.18
CAPITAL BUDGETING
A company must decide whether to introduce a new product line. The new product
have startup costs, operational costs, and incoming cash flows over six years. This
project will have an immediate (t=0) cash outflow of 1,000,000 (which include
machinery, and employee training costs). Other cash outflows for years 1
expected to be 20,000 for the first year, increasing by 2,000 for the next five years .
Cash inflows are expected to be 350,000 for Year 1, followed by 320,000, 350,000,
200,000, 210,000 and 100,000 respectively for the next five years. All cash flows ar
after-tax, and there are no cash flows expected after year 6. The required rate of re
is 10%. Determine the Net Present Value and the Internal rate of return of the proje
Required Return
Period
0
1
2
3
4
5
6
10%
Ouflow
(1,000,000.00)
(20,000.00)
(22,000.00)
(24,000.00)
(26,000.00)
(28,000.00)
(30,000.00)
Inflow
350,000.00
320,000.00
350,000.00
200,000.00
210,000.00
100,000.00
NPV
IRR
2)
NPV vs IRR
Required Return
PERIOD
0
1
2
3
4
5
12%
PROJECT A
(1,000,000.00)
0.00
200,000.00
300,000.00
500,000.00
900,000.00
PROJECT B
(1,000,000.00)
400,000.00
400,000.00
300,000.00
300,000.00
200,000.00
NPV
IRR
201,416.06
17%
16.19%
193,695.28
20%
16.04%
b) MIRR
PERIOD
0
1
2
3
4
5
IRR
CAGR
(6,260.00)
24,248.00
24,248.00
24,248.00
24,248.00
42,248.00
388%
MIRR
3)
Project
A
B
C
D
E
F
G
H
I
J
K
L
M
Capital Rationing
Cost
237,005
766,496
304,049
565,178
108,990
89,135
795,664
814,493
480,321
826,610
734,830
910,598
978,621
4,919,171
5,000,000.00
TOTAL NPV
NPV
84,334
26,881
23,162
82,598
20,590
90,404
18,163
97,682
52,063
53,911
56,323
88,349
69,352
80,829
641,695
Include
1
0
0
1
1
1
0
1
1
0
1
1
1
Time
0
1
2
3
4
5
6
7
8
NPV
PVIFA
ANPV
5)
Cost
A
B
C
D
E
F
G
H
I
J
60,693.92
4.11
14,762.32
74,950
138,298
146,661
189,921
201,843
271,477
396,209
407,769
439,207
445,529
IRR
13.00%
11.48%
12.19%
13.82%
11.69%
15.38%
16.16%
16.51%
15.87%
15.02%
12%
B
Cash Flow
(6,500)
20,000
30,000
40,000
50,000
95,520.07
3.04
31,448.50
C
Cash Flow
(10,050)
30,000
30,000
30,000
30,000
30,000
98,093.29
3.60
27,212.03
if positive acceptable
higher than required return-acceptable
D
Cash Flow
(12,500)
24,000
25,000
26,000
28,000
30,000
31,000
32,000
34,000
126,094.79
4.97
25,383.24
Last Name
Baslig
First Name
Nancy
Department
Operations
Last Name
Abad
Baslig
Bolante
Candido
Collado
Dionisio
Donato
Escalon
Edralin
First Name
Yolanda
Nancy
Ken
Larry
Moe
Rita
James
Pamela
Paul
Department
Sales
Operations
Marketing
Administration
Administration
Administration
Operations
Data Processing
Data Processing
Enter Income:
The Rate is:
45,500
31.00% (Vlookup)
31.00% (Lookup)
ID
3432
ID
4466
3432
4422
2822
1231
2604
3983
2144
1102
Income is
But Less Than
Greater Than or
or Equal To
Equal To
0
2,650
2,651
27,300
27,301
58,500
58,501
131,800
131,801
284,700
284,701
Date Hired
4/16/2003
Date Hired
3/5/1998
4/16/2003
12/1/2004
9/16/1999
3/12/2001
4/15/2005
2/9/2000
3/24/2004
11/12/2003
Rate
15.00%
28.00%
31.00%
36.00%
39.60%
45.25%
Enter Income:
The Tax Rate is:
21,566
28.00%
Income is
Greater Than or
Equal To
But Less Than
Rate
2,651
2,650
27,300
15.00%
28.00%
Date:
Amount:
1/12/2007
189
189
Date
1/1/2007
1/2/2007
1/3/2007
1/4/2007
1/5/2007
1/6/2007
1/7/2007
1/8/2007
1/9/2007
1/10/2007
1/11/2007
1/12/2007
1/13/2007
1/14/2007
1/15/2007
1/16/2007
1/17/2007
1/18/2007
1/19/2007
1/20/2007
Weekday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Sunday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Sunday
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Amount
23
179
149
196
131
179
134
179
193
191
176
189
163
121
100
109
151
138
114
156
4) Comparison of the 3
Value:
James
LOOKUP:
VLOOKUP:
MATCH & INDEX
300
300
300
Name
Amount
Bob
Ellen
Froilan
James
Jessica
John
Teddy
Jun
Eric
Jazz
50
25
200
300
400
100
150
240
245
346
January
February
March
April
May
June
July
Product 1
2,892
3,380
3,744
3,221
4,839
3,767
5,467
5) TWO-WAY Lookup
Month:
Product:
Month Offset (Row #):
Product Offset (Col #):
Sales:
April
Product 2
5
3
2,438
Product 2
1,771
4,711
3,223
2,438
1,999
5,140
3,337
Single-formula -->
2,438
August
September
October
November
December
Total
3,154
1,718
1,548
5,083
5,753
44,566
4,895
2,040
1,061
3,558
2,839
37,012
27,301
58,501
131,801
58,500
131,800
284,700
31.00%
36.00%
39.60%
284,701
45.25%
Product 3
4,718
2,615
5,312
1,108
1,994
3,830
3,232
Combined
9,381
10,706
12,279
6,767
8,832
12,737
12,036
1,607
1,563
2,590
3,960
3,013
35,542
9,656
5,321
5,199
12,601
11,605
117,120
Product
Widgets
Ridgets
Lidgets
Kidgets
Fidgets
Zidgets
Units Sold
Unit Price
3
10
5
9
3
1
50
100
20
10
60
200
Normal Calcs
150
1,000
100
90
180
200
1,720 (SUM formula)
1,720 (SUMPRODUCT Formula)
1,720 (Single array formula)
Sale
Sanchez
Jones
Santos
Reyes
Aguila
Fortes
Jordan
Milanes
Sanchez
Wong
Evangelista
Sanchez
Fortes
Sanchez
880
350
441
280
385
281
300
250
201
398
440
595
560
220
1,896
1,896
Row Labels
Sanchez
Grand Total
Sum of Sale
1896
1896
Use array formulas to find the average revenue for all divisions in both sales areas.
2010
Sales
Product 1
NCR
Calabarzon
161,000
198,200
Product X
NCR
Calabarzon
35,000
60,000
Product X
NCR
35,000
Calabarzon
60,000
Add this new data into the mix.
The array formula handles it.
The average function doesn't.
Product 2
NCR
Calabarzon
160,700
190,100
Product 3
NCR
Calabarzon
153,900
190,700
AVE Function
Average NCR
Average Calabarzon
158,533
193,000
ARRAY
127,650
159,750
umIF method
Find the sum of sales for a particular state and a particular beer type.
Determine the following:
a) Total sales from Oregon of Amber Ale beer
b) Total sales from California Pale Ale
c) Total 2008 sales of Ted of Pilsner from Wahington
d) Average sales of Stout from Wahington in 2008
e) Average sales of Deb in Winter for the past three years
Sample:
Washington, Amber Ale:
Season
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
YearSales
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
6,674,005
6,674,005
Type
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
State
California
California
California
California
California
California
Oregon
Oregon
Oregon
Oregon
Oregon
Oregon
Washington
Washington
Washington
Washington
Washington
Washington
California
California
California
California
California
California
Oregon
Oregon
Sales_Beer
554,536
540,643
577,548
455,905
490,871
446,383
457,726
347,696
384,541
386,420
370,970
430,754
500,847
507,070
482,346
608,713
150,000
500,649
545,780
440,644
580,359
536,225
414,908
377,997
331,289
384,572
Salesman
Ted
Deb
Ted
Jun
Jun
Deb
Ted
Jun
Kate
Ted
Kyle
Deb
Jun
Jun
Ted
Kate
Kate
Ted
Kate
Deb
Kate
Kyle
Ted
Jun
Kate
Kate
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Fall
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2009
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Oregon
Oregon
Oregon
Oregon
Washington
Washington
Washington
Washington
Washington
Washington
California
California
California
California
California
California
Oregon
Oregon
Oregon
Oregon
Oregon
Oregon
Washington
Washington
Washington
Washington
Washington
Washington
California
California
California
California
California
California
Oregon
Oregon
Oregon
Oregon
Oregon
Oregon
Washington
Washington
Washington
Washington
Washington
Washington
California
365,813
396,338
453,761
356,538
606,332
535,218
493,364
559,100
220,350
476,975
545,621
489,255
523,124
612,216
425,562
485,285
467,173
447,637
407,542
449,575
403,248
449,293
493,845
523,464
575,692
568,633
100,250
487,012
519,177
488,597
456,653
528,843
420,782
439,751
348,503
352,086
336,824
350,924
338,334
383,738
508,939
393,294
430,380
390,741
118,030
522,282
514,649
Deb
Jun
Kate
Ted
Deb
Jun
Kate
Kate
Ted
Ted
Kate
Jun
Ted
Jun
Jun
Jun
Kate
Ted
Jun
Kate
Deb
Jun
Jun
Jun
Deb
Kate
Jun
Kate
Ted
Ted
Ted
Ted
Kate
Ted
Kate
Jun
Deb
Kate
Kate
Ted
Ted
Ted
Kate
Ted
Jun
Deb
Ted
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
California
California
California
California
California
Oregon
Oregon
Oregon
Oregon
Oregon
Oregon
Washington
Washington
Washington
Washington
Washington
Washington
California
California
California
California
California
California
Oregon
Oregon
Oregon
Oregon
Oregon
Oregon
Washington
Washington
Washington
Washington
Washington
Washington
California
California
California
California
California
California
Oregon
Oregon
Oregon
Oregon
Oregon
Oregon
498,673
541,930
541,022
487,516
558,787
393,690
427,784
386,772
430,461
481,311
529,637
596,707
541,275
574,091
567,246
530,193
475,884
533,691
534,352
588,845
513,750
516,692
539,883
418,483
452,955
432,909
493,853
393,368
405,946
561,874
544,747
470,339
530,410
455,378
668,180
597,626
612,909
585,669
641,282
447,013
476,238
421,466
427,983
429,498
544,597
446,014
487,611
Kate
Kate
Jun
Kate
Kate
Deb
Kate
Ted
Jun
Kyle
Jun
Jun
Jun
Ted
Kate
Kate
Kate
Ted
Deb
Ted
Kate
Jun
Ted
Kate
Jun
Jun
Ted
Kate
Ted
Kate
Deb
Deb
Jun
Deb
Jun
Kate
Ted
Deb
Kate
Ted
Deb
Ted
Jun
Ted
Kyle
Ted
Ted
Summer
Summer
Summer
Summer
Summer
Summer
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Fall
Spring
Spring
Spring
Spring
Spring
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2009
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Washington
Washington
Washington
Washington
Washington
Washington
California
California
California
California
California
California
Oregon
Oregon
Oregon
Oregon
Oregon
Oregon
Washington
Washington
Washington
Washington
Washington
Washington
California
California
California
California
California
California
Oregon
Oregon
Oregon
Oregon
Oregon
Oregon
Washington
Washington
Washington
Washington
Washington
Washington
California
California
California
California
California
565,106
567,487
538,648
708,608
634,104
522,179
511,406
487,020
563,504
565,428
380,743
351,971
388,646
337,401
441,713
438,764
378,201
413,519
516,512
494,282
538,958
502,214
539,525
517,806
625,097
632,542
565,957
609,354
501,393
461,281
476,654
405,717
407,780
462,903
460,030
463,982
622,573
578,387
579,998
594,253
473,198
601,406
616,561
559,403
597,369
709,122
462,316
Ted
Kate
Ted
Ted
Ted
Jun
Jun
Jun
Kate
Kate
Ted
Kate
Ted
Ted
Jun
Ted
Jun
Deb
Kate
Kate
Jun
Jun
Ted
Ted
Kate
Jun
Kate
Jun
Jun
Ted
Jun
Kate
Jun
Ted
Kate
Kate
Ted
Ted
Jun
Jun
Kate
Ted
Deb
Ted
Deb
Ted
Deb
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Spring
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Summer
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
2010
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
Porter
Stout
Amber Ale
Hefeweizen
Pale Ale
Pilsner
California
Oregon
Oregon
Oregon
Oregon
Oregon
Oregon
Washington
Washington
Washington
Washington
Washington
Washington
California
California
California
California
California
California
Oregon
Oregon
Oregon
Oregon
Oregon
Oregon
Washington
Washington
Washington
Washington
Washington
Washington
California
California
California
California
California
California
Oregon
Oregon
Oregon
Oregon
Oregon
Oregon
Washington
Washington
Washington
Washington
466,554
380,338
406,420
422,373
385,923
474,148
438,409
554,317
609,069
563,406
606,490
564,560
600,194
549,802
493,119
576,355
670,233
524,001
527,703
355,197
420,947
423,393
547,726
478,507
425,549
618,631
593,074
708,115
657,230
636,020
648,918
508,848
522,433
526,729
504,010
426,401
430,903
319,614
417,155
395,381
385,921
349,157
375,737
528,322
497,798
515,122
501,404
Jun
Ted
Ted
Ted
Deb
Deb
Kate
Kate
Deb
Ted
Kate
Jun
Jun
Kate
Kate
Jun
Jun
Kate
Jun
Ted
Jun
Kate
Ted
Kate
Jun
Kate
Kate
Ted
Kate
Kate
Deb
Deb
Ted
Jun
Ted
Ted
Ted
Jun
Deb
Kate
Ted
Kate
Deb
Ted
Kate
Kate
Deb
Winter
Winter
2010
2010
Porter
Stout
Washington
Washington
518,350
445,582
Office
Manila
Cebu
Davao
Manila
Davao
Davao
Manila
Manila
Davao
Cebu
Amount
5,000.00
450.00
3,211.56
250.00
125.50
3,000.00
2,100.00
335.39
65.00
250.00
DateDue
4/1/2011
4/19/2011
4/28/2011
4/30/2011
5/4/2011
5/10/2011
5/23/2011
5/23/2011
5/28/2011
5/30/2011
Today
5/5/2011
5/5/2011
5/5/2011
5/5/2011
5/5/2011
5/5/2011
5/5/2011
5/5/2011
5/5/2011
5/5/2011
Kate
Deb
Exercise 2
InvoiceNum
AG-0145
AG-0189
AG-0220
AG-0310
AG-0355
AG-0409
AG-0581
AG-0600
AG-0602
AG-0633
TOTAL
Difference
-34
-16
-7
-5
-1
5
18
18
23
25
390,741
STOCK
3-Jan-12
1-Dec-11
1-Nov-11
1-Oct-11
1-Sep-11
2-Aug-11
1-Jul-11
1-Jun-11
3-May-11
1-Apr-11
1-Mar-11
2-Feb-11
2-Jan-11
1-Dec-10
3-Nov-10
1-Oct-10
2-Sep-10
1-Aug-10
1-Jul-10
2-Jun-10
1-May-10
1-Apr-10
3-Mar-10
3-Feb-10
2-Jan-10
2-Dec-09
1-Nov-09
1-Oct-09
3-Sep-09
1-Aug-09
1-Jul-09
3-Jun-09
1-May-09
1-Apr-09
1-Mar-09
1-Feb-09
2-Jan-09
3-Dec-08
1-Nov-08
1-Oct-08
A
35.3
37.68
37.62
36.19
33.91
28.51
30.8
36.4
30.66
25.26
24.24
22.17
23.49
22.51
21.5
21.85
17.69
16.69
15.56
16.35
14.92
12.39
12.01
10.43
9.1
8.18
9.14
7.46
4.78
5.14
6.59
7.38
8.01
7.38
9.23
7.23
8.62
8.87
7.78
5.44
B
31.94
32.06
30.74
28.62
27.52
26.53
27
25.53
25.92
26.73
28.05
27.78
25.27
24.38
25.16
24.17
22.76
21.67
22.24
21.33
18.11
16.53
13.98
13.16
13.77
15.55
17.88
17.27
16.84
22.65
23.6
27.13
28.55
27.08
26.46
24.88
25.91
25.24
25.59
24.62
C
22.26
23.39
22.38
22.22
20.02
21.25
24.3
27.51
28.45
25.6
27.07
29.06
30.33
31.85
33.33
32.73
27.33
28.4
24.7
20.65
20.66
18.24
16.14
17.1
15.51
15.42
20.67
17.11
13.74
16.49
18.56
18.05
27.28
28.24
30.02
28.18
34.57
31.03
32.22
24.07
D
35.7
36.5
35.15
33.92
33.38
32.4
32.86
32.02
30.57
29.42
29.98
31.94
32.83
30.25
27.81
28.14
28.92
28.51
27.42
27.65
27.49
28.21
24.42
23.03
21.99
23.14
25.57
23.81
23.25
28.23
30.15
27.2
28.98
29.36
34.81
35.83
34.41
37.13
35.5
33.58
E
63.72
63.42
60.32
58.11
56.07
57.83
54.73
55.16
55.17
53.23
49.97
53.11
52.39
50.67
48.35
49.13
48.34
48.4
50.32
50.23
52.8
54.52
55.98
50.74
51.65
51.74
54.93
56.41
51.92
52.14
50.32
49.99
58.69
60.88
61.92
58.06
54.66
56.17
55.36
54.87
F
13.23
14.64
14.18
13.03
13.94
14
14.61
15.43
14.64
15.14
13.29
13.47
14.24
15.57
12.85
11.81
10.4
11.16
10.68
10.51
10.04
9.85
7.12
7.88
8.63
8.72
10.67
7.93
9.08
10.9
12.48
14.71
16.22
14.62
15.06
13.59
13.98
14.26
17.18
14.56
4-Sep-08
1-Aug-08
2-Jul-08
1-Jun-08
1-May-08
2-Apr-08
1-Mar-08
1-Feb-08
2-Jan-08
1-Dec-07
1-Nov-07
2-Oct-07
1-Sep-07
1-Aug-07
3-Jul-07
1-Jun-07
1-May-07
3-Apr-07
1-Mar-07
1-Feb-07
26-Jan-07
Ave Ret
Std Dev
CAGR
Beta
4.41
5.93
8.81
9.99
9.06
10.09
7.88
11.9
18.66
15.03
19.82
29.32
45.5
60.75
64.35
61.94
56.53
65.12
85.69
79.85
80.51
25.63
28.36
27.52
25.55
28.59
25.97
25.07
27.76
27.72
32.11
30.1
29.08
28.32
28.04
29.73
30.9
33.6
35.71
35.07
29.79
35.07
20.15
27.56
29.37
28.82
26.61
30.43
25.9
28.12
36.41
29.58
37.45
44.26
40.88
73.64
65.64
65.73
61.3
62.32
64.84
55.53
48.59
34.31
37.55
39.94
44.84
44.84
44.41
38.31
42.4
41.92
43.71
45.04
49.81
52.54
53.16
46.87
47.93
47.6
47.4
46.91
39.55
40.04
52.49
49.94
51.09
47.18
45.78
45.23
41.01
45.63
43.37
48.93
46.57
42.61
43.45
42.53
42.76
46.81
41.12
37.63
32.05
32.84
38.98
15.59
17.86
22.62
21.8
21.63
26.18
24.72
24.45
24.78
20.39
19.79
22.72
21.92
20.79
22.9
20.76
21.82
24.6
20.31
18.41
22
GOAL SEEK
The Goal Seek function causes Excel to change a selected input value in a formula
until the formula produces a desired result. Thus, Goal Seek tells you the value of some
input necessary to reach a given goal.
Discount rate:
Project X
Years
0
Cash flows
(1,000)
Project Y
Years
0
Cash flows
-1,000.00
Project X
10.000%
1
650
2
500
3
200
NPVX
IRRX
154.40
1
200.00
2
550.00
3
700.00
NPVY
IRRY
162.28
NPV PROFILE
Project Y
$500
$400
Project's NPV
0%
5%
10%
15%
20%
25%
$300
Project X
$200
Project Y
$100
$0
-$100
-$200
0
0.05
0.1
0.15
Cost of Capital
0.2
0.25
1)
Blue Ridge Hot Tubs manufactures and sells two models of hot tubs: the Aqua-Spa
and the Hydro-Lux. The owner of the company needs to decide how many of each type
to produce for the next production cycle. Prefabricated fiberglass hot tub shells are bought
from a local supplier and pump and tubing are added to create the hot tubs. (The supplier
has the capacity to deliver as many as the company needs). The same type of pump is installed
into both hot tubs. Each Aqua requires 9 hrs of labor and 12 ft of tubing. Each Hydro requires
6 hrs of labor and 16 ft of tubing. The company expects 1,866 hrs of production labor hours and
2,880 ft of tubing available. A CM of 350 and 300 is earned on each Aqua and Hydro respective
The company expects to be able to sell all that it produces. There are 300 pumps available.
How many Aqua and Hydro should be produced to maximize profits?
2)
Available in Months to
Investment
Month
A
1, 2, 3, 4, 5, 6
B
1, 3, 5
C
1, 4
D
1
Maturity
1
2
3
6
Yield at
Maturity
1.8%
3.5%
5.8%
11.0%
Aqua-Spa
ny of each type
shells are bought
bs. (The supplier
ype of pump is installed
Each Hydro requires
duction labor hours and
ua and Hydro respectively.
0 pumps available.
pany can
e investments
onths with
that allows
1
240
1,000
4,000
2
250
4,500
3,500
Month
3
4
265
285
6,000
5,500
4,000
4,500
5
280
3,500
4,000
6
260
4,000
3,500
seasonal
d maintenance
s to face over
nits can be
ny likes to
ny wants to
ntory each
d like to identify
REGRESSION ANALYSIS
Month
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
X
1
2
3
4
5
6
7
8
9
10
11
12
Using line
Actual Y Predicted Y
512
743
559
875
755
890
663
934
1,042
1,102
Using Trend
Predicted Y Forecasted