3. The Elder Board outlined three options that are available to alleviate the problem. Identify...
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3. The Elder Board outlined three options that are available to alleviate the problem. Identify and describe other options that could be considered by the Board. 4. Using Excel, prepare a one-year cash flow analysis of HCC's current annual operating cash flows before considering any of the options presented by the elders. Include an analysis of the estimated annual cash inflows, outflows, and net cash flow. Present data in total and per attendee. Determine the breakeven point and margin of safety (in number of attendees). 5. Provide a cash flow analysis, similar to the analysis of the current year prepared in the prior question, for each of the three alternatives for the coming five years. For each option, determine how many people must attend in order to breakeven for all five years, in addition to the margin of safety (in attendees) for each year based on projections. 6. Calculate the net present value (NPV) of each option. In order to cover the cost of debt, the operating costs, and the projected growth, assume an 8 percent discount rate for Options 1 and 2. Option 3 introduces a new methodology for
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