MEL11-F14.pdf - Applied Economics 3002 Applied Microeconomics Managerial Economics Fall 2014 Lab Session 11 Investment Analysis and Capital Budgeting

MEL11-F14.pdf - Applied Economics 3002 Applied...

This preview shows page 1 - 2 out of 2 pages.

Applied Economics 3002 Applied Microeconomics: Managerial Economics Fall 2014 Lab Session 11: Investment Analysis and Capital Budgeting The assignment component of this lab is due Tuesday, December 9. Include your name, the course, your lab section, Assignment 11 and the due date on your assignment. A. Investment Analysis.This exercise involves the application of the net present value, internal rate of return, and payback period criteria to investments in four alternative business projects. Net cash flows for the projects are as follows: ──────────────────Net Cash Flows ──────────────────Year Keeneland Lexington Tates Creek Nicholasville Pine Meadows 0 -144,000 -297,000 -297,000 -297,000 -297,000 1 32,025 52,650 108,000 101,250 2 32,025 52,650 94,500 87,750 20,250 3 32,025 52,650 81,000 74,250 33,750 4 32,025 52,650 67,500 60,750 47,250 5 32,025 52,650 54,000 47,250 60,750 6 32,025 52,650 40,500 33,750 74,250 7 32,025 52,650 27,000 20,250 87,750 8 32,025 52,650 -54,000 6,750 101,250 Total 112,200 124,200 121,500 135,000 135,000 A.1The data may be downloaded from the course website (MEL11-F14.xlsx). Set up a spreadsheet to calculate the net present values and internal rates of return for these or any other investments, and to determine their ranks based on the NPV and IRR. 6,750
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read both pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture