Capital-Budgeting-Analysis-of-Automated-Material-Handling-System-Case-Study-16-58-help

            

In this module, you will have an opportunity to demonstrate your understanding of a capital budget. The principles of capital budgeting are applicable to all industries. 

Refer to Case Study 16-58, Capital-Budgeting Analysis of Automated-Material-Handling System, at the end of Chapter 16. Build or use an existing Excel Spreadsheet and complete requirements 1, 2, and 3.

For this case study, you will demonstrate your ability to correctly calculate the problem and demonstrate creative thinking by analyzing the case and answering the questions that are intended to interpret the data.

HELPFUL HINTS FOR ASSIGNMENT POSTED IN ANNOUNCEMENT THIS WEEK:

The net present value of the proposed investment is $(235,280), calculated as follows:

Instant Dinners, Inc.
Net-Present-Value Analysis

	Time 0		Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8
New equipment ……………………………………	$(4,500,000	)
Working capital ……………………………………	(1,000,000	)															$1,000,000
Disposition of  equipment:
 Old forklift trucks	100,000
 New conveyor   belt system ……………………………………..																	100,000
Operating revenue			$700,000		$700,000		$700,000		$700,000		$700,000		$700,000		$700,000		700,000
Operating savingsa			600,000		600,000		600,000		600,000		(200,000	)	600,000		600,000		600,000
Tax effect b…………………………………………..	160,000		(335,000	)	(335,000	)	(335,000	)	(335,000	)	(15,000	)	(295,000	)	(295,000	)	(335,000	)
 Total cash flows	$(5,240,000	)	$965,000		$965,000		$965,000		$965,000		$485,000		$1,005,000		$1,005,000		$2,065,000
12% discount  factor*…………………………………………………	´    1.000		´     .893		´     .797		´     .712		´     .636		´   .567		´    .507		´    .452		´    .404
Present value ……………………………………….	$(5,240,000	)	  $861,745		  $769,105		  $687,080		  $613,740		$274,995		$  509,535		$  454,260		$  834,260
Net present value …………………………………	$  (235,280	)

*From Table III in Appendix A.

See attachment with question and Excel sheet to put answers.  ******ONLY ANSWER QUESTION 1, 2 and  3 ********   Must complete in attached Excel worksheet (already set up so should be easier). 

 

Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code "Newclient" for a 15% Discount!

NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.