Briefly Discuss the Rationale That Underlies Managements Belief
Order ID:89JHGSJE83839 Style:APA/MLA/Harvard/Chicago Pages:5-10 Instructions:
Briefly Discuss the Rationale That Underlies Managements Belief
Please complete the following 5 exercises below in either Excel or a word document (but must be single document). You must show your work where
appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment
Submission button. 1. Basic present value calculations Calculate the present value of the following cash flows, rounding to the nearest dollar: a. A single cash
inflow of $12,000 in five years, discounted at a 12% rate of return. b. An annual receipt of $16,000 over the next 12 years, discounted at a 14% rate of return. c.
A single receipt of $15,000 at the end of Year 1 followed by a single receipt of $10,000 at the end of Year 3.
The company has a 10% rate of return. d. An annual receipt of $8,000 for three years followed by a single receipt of $10,000 at the end of Year 4. The company
has a 16% rate of return. 2. Cash flow calculations and net present value On January 2, 20X1, XXXXX XXXXXe invested $10,000 in the stock market and
purchased 500 shares of Heartland Development, Inc. Heartland paid cash dividends of $2.60 per share in 20X1 and 20X2; the dividend was raised to $3.10
per share in 20X3. On December 31, 20X3, Greene sold his holdings and generated proceeds of $13,000. Greene uses the net-present- value method and
desires a 16% return on investments. a. Prepare a chronological list of the investment’s cash flows. Note: Greene is entitled to the 20X3 dividend. b. Compute
the investment’s net present value, rounding calculations to the nearest dollar. c. Given the results of part (b), should Greene have acquired the Heartland
stock? Briefly explain. 3. Straightforward net present value and internal rate of return The City of Bedford is studying a 600-acre site on Route 356 for a new
landfill. The startup cost has been calculated as follows: Purchase cost: $450 per acre Site preparation: $175,000 The site can be used for 20 years before it
reaches capacity. Bedford, which shares a facility in Bath Township with other municipalities, estimates that the new location will save $40,000 in annual
operating costs. a. Should the landfill be acquired if Bedford desires an 8% return on its investment? Use the net-present-value method to determine your
answer. 4. Straightforward net-present-value and payback computations STL Entertainment is considering the acquisition of a sight-seeing boat for summer
tours along the Mississippi River.
The following information is available: Cost of boat $500,000 Service life 10 summer seasons Disposal value at the end of 10 seasons $100,000 Capacity per
trip 300 passengers Fixed operating costs per season (including straight-line depreciation) $160,000 Variable operating costs per trip $1,000 Ticket price $5
per passenger All operating costs, except depreciation, require cash outlays. On the basis of similar operations in other parts of the country, management
anticipates that each trip will be sold out and that 120,000 passengers will be carried each season. Ignore income taxes. Instructions: By using the net-
present-value method, determine whether STL Entertainment should acquire the boat.
Assume a 14% desired return on all investments- round calculations to the nearest dollar. 5. Equipment replacement decision Columbia Enterprises is studying the replacement of some equipment that originally cost $74,000. The equipment is expected to provide six more years of service if $8,700 of major repairs are performed in two years. Annual cash operating costs total $27,200. Columbia can sell the equipment now for $36,000; the estimated residual value in six years is $5,000. New equipment is available that will reduce annual cash operating costs to $21,000. The equipment costs $103,000, has a service life of six years, and has an estimated residual value of $13,000.
Company sales will total $430,000 per year with either the existing or the new equipment. Columbia has a minimum desired return of 12% and depreciates all equipment by the straight-line method. Instructions: a. By using the net-present-value method, determine whether Columbia should keep its present equipment or acquire the new equipment. Round all calculations to the nearest dollar, and ignore income taxes. b. Columbia’s management feels that the time value of money should be considered in all long-term decisions. Briefly discuss the rationale that underlies management’s belief.
Briefly Discuss the Rationale That Underlies Managements Belief
RUBRIC
Excellent Quality
95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality
0-45%
37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
You Can Also Place the Order at www.collegepaper.us/orders/ordernow or www.crucialessay.com/orders/ordernow