Week 3 Final Project


Question Description:

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Assignment 3: Final Project Assume that MNQ Company is looking to undertake a new project. The cash flows and applicable discount rate are provided in the third tab of SU_MBA6010_Final_Project_Information.xls in the Doc Sharing area. Calculate the IRR, NPV, MIRR, and payback period of the project. The company has a three-year payback cutoff period for projects. Determine if it makes financial sense for the company to undertake the project. Justify your decision. Submit your answers in a 5- to 7-page Microsoft Word document and your calculations in a Microsoft Excel sheet. Please do perform all the calculations needed for this project in excel document and also the project needs to be done in a word document as specified by the instructions in the assignment, so we need two documents for this assignment. Thank you, Nela Mocanu. Document Preview: Beta_CAPM – Week 4 Cash Flows – Week 3 Income Stmt. – Weeks 1,2,5,&6 Balance Sheet – Weeks 1,5,&6 Current Assets Cash and cash equivalents Accounts receivable Inventories Fixed Assets Total Current Assets Property, plant, and equipment Intangible assets Total Fixed Assets Total Assets Assets Liabilities and Stockholders’ Equity Accounts payable Notes payable Total Current Liabilities Current Liabilities Long-Term Liabilities Long-term debt Deferred taxes Total Long-Term Liabilities Stockholders’ Equity Total Liabilities Total Stockholders’ Equity Total Liabilities and Stockholders’ Equity Sales Cost of goods sold Selling, general, and administrative expenses Depreciation Operating income Other income Earnings before interest and taxes (EBIT) Earnings before taxes (EBT) Addition to retained earnings Dividends Accrued expenses Balance Sheet ($000) Additional Information: Book value per share Market price per share Earnings per share Dividends per share Time 0 Time 1 Time 2 Time 3 Time 4 Time 5 Time 6 Time 7 Assumed Discount Rate = 10% Stock #1 Stock #2 Stock #3 Stock #4 Stock #5 Stock #6 Stock #7 Stock #8 Stock #9 Risk-Free Rate of Return = 5% Taxes (35%) MNQ Company MNQ Company’s New Project’s Estimated Cash Flows MNQ Company’s common stock = Beta (Year = 2008) Net property, plant, and equipment Market Risk Premium = 6% Interest expense Income statement ($000 – Except for per share information) Net income Shares outstanding Less: Accumulated depreciation Common stock Capital surplus Retained earnings Page 1 of 1 MBA6010_Managerial Finance © 2010 South University 0.85 1.50 0.27 1.10 2.15 -0.50 0.70 1.40 1.20 0.65 Page 1 of 1 MBA6010_Managerial Finance © 2010 South University ($35,000.00) $500.00 $1,500.00 $3,500.00 $6,000.00 $10,000.00 $14,000.00 $24,000.00 Page 1 of 1 MBA6010_Managerial Finance © 2010 South… Attachments: SU-MBA6010-Fi….xls

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