Purpose of Assignment<\/strong> <\/p>\nThe 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. <\/p>\n
Assignment Steps <\/strong><\/p>\nResources:<\/strong> Corporate Finance<\/i><\/p>\nCreate<\/strong> a 350-word memo to management including the following:<\/p>\n\n- Describe the use of internal rate of return (IRR), net present value (NPV), and the payback method in evaluating project cash flows.<\/li>\n
- Describe the advantages and disadvantages of each method. <\/li>\n<\/ul>\n
Calculate <\/strong>the following time value of money problems: <\/p>\n\n- 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%?<\/li>\n
- What is the future value if you plan to invest $200,000 for 5 years and the interest rate is 5%?<\/li>\n
- What is the interest rate for an initial investment of $100,000 to grow to $300,000 in 10 years?<\/li>\n
- 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?<\/li>\n
- 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. <\/li>\n<\/ol>\n
Calculate<\/strong> the project cash flow generated for Project A and Project B using the NPV method. <\/p>\n\n- Which project would you select, and why? <\/li>\n
- Which project would you select under the payback method? The discount rate is 10% for both projects. <\/li>\n
- Use Microsoft\u00ae<\/sup> Excel\u00ae<\/sup> to prepare your answer. <\/li>\n
- Note that a similar problem is in the textbook in Section 5.1.<\/li>\n<\/ul>\n
Sample Template for Project A and Project B: <\/p>\n
Show<\/strong> all work.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"FIN 571 WEEK 3 ASSIGNMENT 2: Using the Payback Method, IRR, and NPV oDue Feb 03, 6:00 PM (PST) oNot Submitted oPOINTS 6 Practice\/Simulation\/Homework\/Game no new messages Objectives: 3.1 3.2 Instructions Assignment Files Grading Purpose of Assignment The purpose of this assignment is to allow the student to calculate the project cash flow using net […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_joinchat":[]},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/179467"}],"collection":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/comments?post=179467"}],"version-history":[{"count":0,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/179467\/revisions"}],"wp:attachment":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/media?parent=179467"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/categories?post=179467"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/tags?post=179467"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}