complete all exercises. Highlight the answer and provide explanations (100 words) to each of the answers along with any relevant calculations to receive credit. Your part in completing the assignment is to demonstrate an understanding and application of the concepts covered. Please complete the assignment in Microsoft Excel (preferred) or Word document.
Your assignment will be evaluated according to the following Assignment Requirements:
| Guidelines | Assignment Grading Criteria | Points |
| Content (60%) | Response demonstrates a clear understanding of the key elements of assignment questions | 12 |
| Response thoroughly covers the question elements in a substantive manner | 12 | |
| Answers demonstrate critical thinking and analysis | 12 | |
| Answers are complete and accurate | 12 | |
| Answers provide adequate information on the given topic | 12 | |
| Section Total | 60 | |
| Organization & Calculations (30%) | Explanations flow in a logical sequence | 7 |
| Answers are correct and address major points of exercise | 8 | |
| Answers and/or formulas are present and have a logical flow | 8 | |
| Student explanations address major points | 7 | |
| Section Total | 30 | |
| Assignment Format, Writing Style, & Grammar (10%) | Sentences are well constructed, complete, clear, and concise | 1 |
| The tone is appropriate to the content and assignment | 1 | |
| Grammar, spelling, and punctuation are correct | 2 | |
| Assignment is submitted in Microsoft Excel/Word format | 5 | |
| Section Total | 10 | |
| Total Score | 10 |
Highlight the answer and provide explanations (100 words) to each of the answers along with any relevant calculations to receive credit. Your part in completing the assignment is to demonstrate an understanding and application of the concepts covered. Please complete the assignment in a Microsoft Word document.
1. A project has an initial cost of $45,000. The incremental inflows associated with the project are $20,000 in year 1, $15,000 in year 2, $10,000 in year 3 and $8,000 in year 4. All cash inflows are at the end of the year. The appropriate discount rate for this project is 8.0%. (HINT: Possibly use Excel Worksheet)
2. What is the project’s payback period?
a. 5.00 Years
b. 3.00 Years
c. 8.00 Years
d. 7.00 Years
3. What is the project’s discounted payback period?
a. 2.87 Years
b. 3.97 Years
c. 10.25 Years
d. 6.75 Years
4. What is the project’s net present value?
a. $197.16
b. $278.96
c. $345.21
d. $225.35
5. What is the project’s internal rate of return? Calculate to two decimal places.
a. 3.52%
b. 8.23%
c. 5.35%
d. 2.75%
6. What is the project’s modified internal rate of return? Calculate to two decimal places.
a. 3.52%
b. 7.60%
c. 5.35%
d. 8.12%
A project has an initial cost of $45,000. The incremental inflows associated with the project are $20,000 in year 1, $15,000 in year 2, $10,000 in year 3 and $8,000 in year 4. All cash inflows are at the end of the year. The appropriate discount rate for this project is 8.0%. The component costs of capital and their weights are given below:
7. What is the project’s weighted-average cost of capital?
kd = 10% wd = 45%
kp = 5% wp = 10%
ke = 8% we = 45%
T = 40%
a. 6.8%
b. 2.4%
c. 4.3%
d. 8.5%