Assignment_ 8- Capital Budgeting

Assignment_ 8- Capital Budgeting - Arizona State University...

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Arizona State University Fundamentals of Finance Assignment # 8 Due: May 5th (Use the Digital Drop box) This problem set will provide you practice with capital budgeting techniques. In particular, this problem set will help you become familiar with functions in Excel that are critical for capital budgeting. Do problems 1 5 in Excel. Chapter 11 in the Excel workbook is a useful reference for this assignment (I posted this chapter on Blackboard). 1) Read 332-340 —262 in the Excel book regarding the estimation of cash flows for capital budgeting. After reading this section, recreate Exhibit 11-2 for the “Supreme Shoe Company”. Make sure to use formulas where appropriate. After recreating Exhibit 11-2 , you should obtain the following after-tax, incremental cash flows (see timeline for the Supreme Shoe Company, Figure 11-2 , pg. 341): Year Cash Flows 0: -$62,680 1: $24,248 2: $24,248 3: $24,248 4: $24,248 5: $42,248 2) Using the above cash flows above: a. Calculate the NPV using a discount rate of 15% (see pg. 348 on use of NPV function).
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Assignment_ 8- Capital Budgeting - Arizona State University...

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