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Purpose of Assignment
Students should understand and be able to calculate the net present value and internal rate of return for corporate cash flows, determine project cash flows and a company ' s sales, variable costs, fixed costs, and its breakeven point.
Assignment Steps
Resources: Tutorial help on Excel ® and Word ® functions can be found on the Microsoft ® Office website. There are also additional tutorials via the web that offer support for office products.
Complete the following Questions and Problems from each chapter as indicated.
Show all work and analysis.
Prepare in Microsoft ® Excel ® or Word.
Ch. 9: Questions 7 & 8( Questions and Problems section)
7. Calculating IRR A firm evaluates all of its projects by applying the IRR rule. If the required return is 14 percent, should the firm accept the following project?
8. Calculating NPV For the cash flows in the previous problem, suppose the firm uses the NPV decision rule. At a required return of 11 percent, should the firm accept this project? What if the required return is 24 percent?
Ch. 10: Questions 3 & 13( Questions and Problems section)