Sales Forecast
1
Feb12
Sales Forecast
Product 1 (units)
Revenue Product 1 (&s)
Cost Product 1 ($s)
Manufacturing Forecast
New Product (Units)
Inventory
New Product (Units)
New Product ($s)
Sales Price per unit
Cost per unit
Operating Expenses
Company Fun
Problem 1
PV
Rate
Nper
Answer:
$67,911
$(3,750)
7.32%
41
Problem 2
FV
PV
Rate
$150,000
$(2,600)
11.19%
I will reach my goal in
38.23 years
Problem 3
FV
Nper
Rate
I will have to deposit
$2,000,000
47
9.32%
$(30,349)
Problem 4
PV
FV
Nper
My rate should be
$
Incremental Rate of Return Analysis
Incremental Rate of Return analysis is used to compare two or more projects with differing
investment amounts (negative cash flows). The internal rate of return is a relative comparison
of projects and does not consider
1. #2 using Park's tables in back using linear interpolation. Blah. check this one out. didn't do right.
at 18%
2. Manage a fund with a 18.9% return per year. Client invests $10000 with 37 ANNUAL withdrawls of $1000. What is account balance 37 year
Sales Forecast
1
Feb12
Sales Forecast
Product 1 (units)
Revenue Product 1 (&s)
Cost Product 1 ($s)
Manufacturing Forecast
New Product (Units)
Inventory
New Product (Units)
New Product ($s)
Sales Price per unit
Cost per unit
Operating Expenses
Company Fun
x
#2
Homewor
$1,15
8.00%
0
il
oday
er year
ears?
at an interest rate of
How much will I have in
$17,003.15 ' ' ' '
<
$1,000,00
$20,00
and the return is 9.00%
when will I reach my goal (years)?
2. I want to accumulate
oday
er year
l
1. I finance a car under the following terms:H HH HH
Purchase Price: HH $18,750 HH HH
Interest Rate:H 4.00%H APR compounded monthly
Term: HH 6Hyears HH
Required Down Payment:H 7.50%H HH
What is the monthly payment?H HH HH
Down Payment $1,406.25
Amount
Problem 1
JK Corporation
JK Corporation plans to manufacture industrial fan motors.
The company is considering two alternative production lines depending on the number
of units they decide to manufacture per month. Financial data for these m
Single Project Acceptance Example
Discount Rate (MARR)
20.00%
If your company's Minimum Acceptable Rate of Return (MARR) is 20%,
would you recommend that it invest $1000 in the Project of Row 10?
YEAR
Project Cash Flow
Present Value of Cash Flow:
Future V
Valuation Measures
Summary
Conventional Payback Period
Definition:
N = P / Pmt
If N < Time; Pursue the Investment
Strength:
A simple measure of how much time is required to recover an Investment (P)
with Equal Periodic Returns (Pmt). The Time threshold mu
Wildcat Company, Inc.
Memorandum
To: SIE 265 Class
From: VP of Marketing
Subject: Financial Model of Proposed Production Increase Project
The company is anticipating borrowing money to finance the acquisition of a
computer system.
4th Project Assignment
Wildcat Company, Inc.
Memorandum
To: SIE 265 Class
From: VP of Marketing
Subject: Financial Model of Proposed Production Increase Project
This is a continuation of the 4th Project assignment.
5th Project Assignment Integrate the results from your Debt wo
Wildcat Company, Inc.
Memorandum
To: SIE 265 Class
From: VP of Marketing
Subject: Financial Model of Proposed Production Increase Project
This is a continuation of the 5th Project assignment.
6th Project Assignment Receivables and Payables
Add two input
Wildcat Company, Inc.
Memorandum
To: SIE 265 Class
From: VP of Marketing
Subject: Financial Model of Proposed Production Increase Project
This is a continuation of the 6th Project assignment.
7th Project Assignment Investments, Depreciation, and Income T
Wildcat Company, Inc.
To: SIE 265 Class
From: VP of Marketing
Subject: Financial Model of Proposed Production Increase Project
This is a continuation of the 7th Project assignment.
8th Project Assignment Valuation.
Create a Valuation Worksheet in your fi
Wildcat Company, Inc.
Project 9
Your assignment is to value the two following production scenarios for Wildcat. This model
begins with your model for Project #8. The Discount Rate (MARR) is 13% per year (APY). Save
Excel copies of these models for SIE 467
Exam Study Problem
Sun Devil Auto Finance has a car you really like for $24,000. Sparky Salesman
sees your UA emblem and offers you the deal of the decade.
Ever wary, you ask about the terms. Sparky says:
There is zero down and the payments are only $476.
Spring 16
SIE
SIE 265
265 ProjectsProjects grading:
grading:
Flexibility
Flexibility of
of the
the Model
Model Flexibility
Flexibilitymeans
meansthat
thatwhen
when you
you change
change one
one para
par
the
Excel
model,
i.e.
linked
cells.
This
is
importa
Study Problems Solutions #2
Effective and Nominal Interest
1. I finance a new car under the following terms:
Purchase Price:
$31,500
Interest Rate:
7.25% APR compounded monthly
Term:
72 months
Down Payment:
10%
What is the monthly payment?
$28,350.00 Fina
Sales/Manufacturing/Inventory Forecast
Sep10
Oct10


Sales Forecast
New Product
Revenue New Product ($s)
Cost New Product ($s)
Manufacturing Forecast
New Product (Units)
Sales Price per unit
Cost per unit
Sales Growth Rate
Operating Expense Growth Rat
Sales/Manufacturing/Inventory Forecast
Sep10
Oct10


Sales Forecast
New Product
Revenue New Product ($s)
Cost New Product ($s)
Manufacturing Forecast
New Product (Units)
0
Inventory
New Product (Units)
New Product ($s)
Sales Price per unit
Cost per un
Sales/Manufacturing/Inventory Forecast
Sep10
Oct10


Sales Forecast
New Product
Revenue New Product ($s)
Cost New Product ($s)
Manufacturing Forecast
New Product (Units)
0
Inventory
New Product (Units)
New Product ($s)
Sales Price per unit
Cost per un
Sales/Manufacturing/Inventory Forecast
Sep10
Oct10


Sales Forecast
New Product
Revenue New Product ($s)
Cost New Product ($s)
Manufacturing Forecast
New Product (Units)
0
Inventory
New Product (Units)
New Product ($s)
Sales Price per unit
Cost per un
Sales/Manufacturing/Inventory Forecast
Sep10

Sales Forecast
New Product
Revenue New Product ($s)
Cost New Product ($s)
Manufacturing Forecast
New Product (Units)
Oct10

0
Inventory
New Product (Units)
New Product ($s)
Sales Price per unit
Cost per un
Exam 1
Review
APR & APY
Effective rate accounts for compounding
APY = Effective rate
APR compounded yearly = APY
APY >= APR
APR = nominal rate
Converting APR
If APR compounded X and money
(payments) are Y then need to convert APR
to APR compounded Y
1st