Excel Solutions - Chapter 09

Fundamentals of Corporate Finance Standard Edition

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Chapter 9 Problems 1-23 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green
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Chapter 9 Question 1 Input area: Year Cash flow 0 $(4,800) 1 1,200 2 2,500 3 3,400 4 1,700 Output area: Payback period 2.32 A B C D E 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
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Chapter 9 Question 2 Input area: Annual cash inflow $840 # of years 8 Initial cost $3,000 . Output area: Payback period 3.57
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Chapter 9 Question 3 Input area: Year Cash Flow (A) Cash Flow (B) 0 $(50,000) $(70,000) 1 30,000 9,000 2 18,000 25,000 3 10,000 35,000 4 5,000 425,000 Required payback 3 Output area: Project A Payback 2.200 Project A Accept Project B Payback 3.002 Project B Reject
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Chapter 9 Question 4 Input area: Annual cash inflows: Year 1 $7,000 Year 2 7,500 Year 3 8,000 Year 4 8,500 Discount rate 14% Initial cost $8,000 . Output area: Discounted payments: Year 1 $6,140.35 Year 2 $5,771.01 Year 3 $5,399.77 Year 4 $5,032.68 Payback period 1.32
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Chapter 9 Question 5 Input area: Annual cash flow $2,100 Discount rate 0% Initial cost $10,000 # of years 6 . Output area: Year 0 $(10,000.00) 1 2,100.00 2 2,100.00 3 2,100.00 4 2,100.00 5 2,100.00 6 2,100.00 Payback period 4.76 Discounted Cash Flow
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Chapter 9 Question 6 Input area: Installation cost $15,000,000 # of years 4 Projected net income: Year 0 $1,416,000 Year 1 $1,868,000 Year 2 $1,562,000 Year 3 $985,000 . Output area: Average net income $1,457,750 Average book value $7,500,000 AAR 19.44%
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Chapter 9 Question 7 Input area: Required Return 18% Annual cash flows: Year 0 $(30,000) Year 1 $20,000 Year 2 $14,000 Year 3 $11,000 . Output area: IRR 26.48% Accept/Reject Accept
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Chapter 9 Question 8 Input area: Required Return 11% Required Return 30% Annual cash flows: Year 0 $(30,000) Year 1 $20,000 Year 2 $14,000 Year 3 $11,000 .
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