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3 Required information Excel Analytics 14-1 (Static) Internal Rate of Return (L014-2, L014-3) Stauffer Company has an opportunity to manufacture and sell a new product for a five-year period. The company estimated the following costs and revenues for the new product: 33 Cout of now equipment Toitial working capital required Overhaul of the equipment after three years salvage value of the equipment after five years 5420,000 $ 50,000 $50,000 $30.000 Annual revenues and costs: Sales Variable expenses Pixed out-of-pocket operating costs S850,000 $500,000 $200,000 nes When the project concludes in five years the working capital will be released for investment elsewhere in the company Click here to download the Excelemolate, which you will use to answer the questions that follow Click here for a brief tutorial on Goal Seek in Excel Excel Analytics 14-1 (Static) Part 3 for rainutate this investment's Internal rate of return. If the company's hurdle rate is 18% would it Bon Pero Excel Analytics 14-1 (Static) Part 3 134 3. In the Excel template, using Goal Seek, calculate this investment's internal rate of return of the company's hurdle rate is 18% would be likely to accept or reject the investment? Why? 4. What is the project's not present value when using a discount rate of 18%? 5. If the company wants to achieve an 18% return on this investment, what is the maximum amount that it can spend ench year on feed out-of-pocket operating costs? Use Goal Seek to compute your answer. Note: The Red out of pocket operating costs remain constant for all five years, therefore modifying cell C13 automatically updates colis 013 through G13 6. If the investment in working capital increased from $80,000 to $100,000 would you expect the internal rate of return to increme, decrease, or stay the same? No computations are necessary to answer this question 7. Refer to the original data. Using Goal Seek, calculate the internal rate of return of the investment in working capital increases from $80,000 to $100.000. Note: Be sure to return the fixed out of pocket operating costs to the original value of $200.000 bo Complete this question by entering your answers in the tabs below. Bees Reg 30 Reus Red He Reg 3 R4 Using Microsoft Excel Goal Seek, calculate the investments internal rate of retum rate of retum 16.9% Res 38 Excel Analytics 14-1 (Static) Part 3 3. In the Excel templote, using Goal Seek, calculate this investment's internal rate of return. If the company's hurdle rate is 18% would it be likely to accept or reject the investment? Why? 4. What is the project's net present value when using a discount rate of 18%? 5. If the company wants to achieve on 18% return on this investment, what is the maximum amount that it can spend each year on feed out-of-pocket operating costs? Use Goal Seek to compute your answer. Note: The fixed out of pocket operating costs remain constant for all five years, therefore modifying cell C13 automatically updates cells D13 through G13. 6. If the investment in working capital increased from $80,000 to $100,000 would you expect the internal rate of return to increase decrease, or stay the same? No computations are necessary to answer this question 7. Refer to the original data. Using Goal Seek, calculate the internal rate of return if the investment in working capital increases from $80,000 to $100,000. Note: Be sure to return the fixed out-of-pocket operating costs to the original value of $200,000). Complete this question by entering your answers in the tabs below. Reg 3A Red 38 Reg 4 Reg 5 Rego Req7 Would the company be likely to accept or reject this investment? the under below I would reject the investment because the IRRI Req3A Reg 4 > Excel Analytics 14-1 (Static) Part 3 3. In the Excel template, using Goal Seek, calculate this investment's internal rate of return. If the company's hurdle rate is 18% would it be likely to accept or reject the investment? Why? 4. What is the project's net present value when using a discount rate of 18%? 5. If the company wants to achieve an 18% return on this investment, what is the maximum amount that it can spend ench year on fixed out-of-pocket operating costs? Use Goal Seek to compute your answer. Note: The fixed out-of-pocket operating costs remain constant for all five years, therefore modifying cell C13 automatically updates cells D13 through G13 6. If the investment in working capital increased from $80,000 to $100,000 would you expect the internal rate of return to increase decrease, or stay the same? No computations are necessary to answer this question 7. Refer to the original data. Using Gool Seek, calculate the internal rate of return if the Investment in working capital increases from $80,000 to $100.000. Note: Be sure to return the fixed out of pocket operating costs to the original value of $(200.000 Complete this question by entering your answers in the tabs below. Reg 4 Reqs Reg 30 Rego Reg RegJA 4. What is the project's not present value when using a discount rate of 1897 Na prsa Vale 5 (13,274) Reg 30 Regs) Excel Analytics 14-1 (Static) Part 3 3. In the Excel template, using Goal Seek. calculate this investment's Internal rate of return. If the company's hurdle rate is 19% would be likely to accept or reject the investment? Why? 4. What is the project's net present value when using a discount rate of 18%? 5. the company wants to achieve an 18% return on this investment, what is the maximum amount that it can spend each year on foed out-of-pocket operating costs? Use Gool Seek to compute your answer. Note: The fixed out of pocket operating costs remain constant for all five years, therefore modifying cell C13 automatically updates cells 013 through G13. 6. If the investment in working capital increased from $80,000 to $100,000 would you expect the internal rate of return to increase decrease, or stay the same? No computations are necessary to answer this question 7. Refer to the original data. Using Goal Seek, calculate the internal rate of return if the investment in working capital increases from $80,000 to $100,000. Note: Be sure to return the fixed out-of-pocket operating costs to the original value of $(200,000) Complete this question by entering your answers in the tabs below. Red Reg 3 Reg 38 Reg4 Reos Rego 5. If the company wants to achieve an 18% return on this investment, what is the maximum amount that it can spend each year on fixed out-of-pocket operating costs? Use Goal Seek to compute your answer. Note: The Fored out-of-pocket operating costs remain constant for all five years, therefore modifying coll CJ automatically updates cells Di 3 through G13. $ 195,755 Operating costs Req6 >

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