Category: Finance

Lesson 5 Homework Solution
100 Points
Chapter 9
Q1: Describe how NPV is calculated, and describe the information this measure provides about a
sequence of cash flows. What is the NPV criterion decision rule?
Example for Question 2: 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?
Yea
r Cash Flow
0
1
2
3
−$34,000
15,000
17,000
13,000
Solution:
The IRR is the interest rate that makes the NPV of the project equal to zero. So, the equation that defines the
IRR for this project is:
0 = –$34,000 + $15,000/(1+IRR) + $17,000/(1+IRR)2 + $13,000/(1+IRR)3
Using a spreadsheet, financial calculator, or trial and error to find the root of the equation, we find that:
IRR = 15.80%
Since the IRR is greater than the required return, we would accept the project.
(Please also see Homework 5 Excel Examples for computation on Excel)
Q2: Calculating IRR: A firm evaluates all of its projects by applying the IRR rule. If the required return is
12.5 percent, should the firm accept the following project?
Yea
r Cash Flow
0
1
2
3
−$42,000
12,000
18,000
28,000
(Please follow above example to solve this question)
Example for Question 3: NPV versus IRR: Bruin, Inc., has identified the following two mutually exclusive
projects:
Year
Cash Flow
(A) Cash Flow (B)
0
1
2
3
4
−$37,500
17,300
16,200
13,800
7,600
−$37,500
5,700
12,900
16,300
27,500
a. What is the IRR for each of these projects? Using the IRR decision rule, which project should the
company accept? Is this decision necessarily correct?
b. If the required return is 11 percent, what is the NPV for each of these projects? Which project
will the company choose if it applies the NPV decision rule?
Solution:
a. The IRR is the interest rate that makes the NPV of the project equal to zero. The equation for the IRR of
Project A is:
0 = –$37,500 + $17,300/(1+IRR) + $16,200/(1+IRR)2 + $13,800/(1+IRR)3 + $7,600/(1+IRR)4
Using a spreadsheet, financial calculator, or trial and error to find the root of the equation, we find
that:
IRR = 19.71%
The equation for the IRR of Project B is:
0 = –$37,500 + $5,700/(1+IRR) + $12,900/(1+IRR)2 + $16,300/(1+IRR)3 + $27,500/(1+IRR)4
Using a spreadsheet, financial calculator, or trial and error to find the root of the equation, we find
that:
IRR = 18.76%
Examining the IRRs of the projects, we see that IRRA is greater than IRRB, so the IRR decision
rule implies accepting Project A. This may not be a correct decision however, because the IRR
criterion has a ranking problem for mutually exclusive projects. To see if the IRR decision rule
is correct or not, we need to evaluate the project NPVs.
b. The NPV of Project A is:
NPVA = –$37,500 + $17,300/1.11+ $16,200/1.112 + $13,800/1.113 + $7,600/1.114
NPVA = $6,330.67
And the NPV of Project B is:
NPVB = –$37,500 + $5,700/1.11 + $12,900/1.112 + $16,300/1.113 + $27,500/1.114
NPVB = $8,138.59
The NPVB is greater than the NPVA, so we should accept Project B.
(Please also see Homework 5 Excel Examples for computation on Excel)
Q3: NPV versus IRR: Bruin, Inc., has identified the following two mutually exclusive projects:
Year
Cash Flow
(A) Cash Flow (B)
0
1
2
3
4
−$40,500
18,000
16,000
14,800
10,600
−$40,500
6,000
12,700
16,000
30,500
a. What is the IRR for each of these projects? Using the IRR decision rule, which project should the
company accept? Is this decision necessarily correct?
b. If the required return is 12 percent, what is the NPV for each of these projects? Which project will
the company choose if it applies the NPV decision rule?
(Please follow above example to solve this question)
Chapter 10
Q4: In the context of capital budgeting, what is an opportunity cost?
Example for Question 5: Calculating Project Cash Flow from Assets: In the previous problem, suppose
the project requires an initial investment in net working capital of $250,000, and the fixed asset will
have a market value of $180,000 at the end of the project. What is the project’s Year 0 net cash flow?
Year 1? Year 2? Year 3? What is the new NPV?
Solution: The cash outflow at the beginning of the project will increase because of the spending on NWC.
At the end of the project, the company will recover the NWC, so it will be a cash inflow. The sale of
the equipment will result in a cash inflow, but we also must account for the taxes that will be paid on
this sale. So, the cash flows for each year of the project will be:
Year Cash Flow
0 –$2,570,000 = –$2,320,000 – 250,000
1 1,019,550
2 1,019,550
3 1,411,750 = $1,019,550 + 250,000 + 180,000 + ($0 – 180,000)(.21)
And the NPV of the project is:
NPV = –$2,570,000 + $1,019,550(PVIFA12%,2) + ($1,411,750/1.123)
NPV = $157,947.28
(Please also see Homework 5 Excel Examples for computation on Excel)
Q5: Calculating Project Cash Flow from Assets: In the previous problem, suppose the project requires
an initial investment in net working capital of $200,000, and the fixed asset will have a market value of
$175,000 at the end of the project. What is the project’s Year 0 net cash flow? Year 1? Year 2? Year 3?
What is the new NPV?
Please follow above example to solve this question)

You are writing a discussion post. Please see attachment for what needs to be done. Make sure you follow all instructions and use APA citations.

Lesson 5 Homework Solution
100 Points
Chapter 9
Q1: Describe how NPV is calculated, and describe the information this measure provides about a
sequence of cash flows. What is the NPV criterion decision rule?
Example for Question 2: 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?
Yea
r Cash Flow
0
1
2
3
−$34,000
15,000
17,000
13,000
Solution:
The IRR is the interest rate that makes the NPV of the project equal to zero. So, the equation that defines the
IRR for this project is:
0 = –$34,000 + $15,000/(1+IRR) + $17,000/(1+IRR)2 + $13,000/(1+IRR)3
Using a spreadsheet, financial calculator, or trial and error to find the root of the equation, we find that:
IRR = 15.80%
Since the IRR is greater than the required return, we would accept the project.
(Please also see Homework 5 Excel Examples for computation on Excel)
Q2: Calculating IRR: A firm evaluates all of its projects by applying the IRR rule. If the required return is
12.5 percent, should the firm accept the following project?
Yea
r Cash Flow
0
1
2
3
−$42,000
12,000
18,000
28,000
(Please follow above example to solve this question)
Example for Question 3: NPV versus IRR: Bruin, Inc., has identified the following two mutually exclusive
projects:
Year
Cash Flow
(A) Cash Flow (B)
0
1
2
3
4
−$37,500
17,300
16,200
13,800
7,600
−$37,500
5,700
12,900
16,300
27,500
a. What is the IRR for each of these projects? Using the IRR decision rule, which project should the
company accept? Is this decision necessarily correct?
b. If the required return is 11 percent, what is the NPV for each of these projects? Which project
will the company choose if it applies the NPV decision rule?
Solution:
a. The IRR is the interest rate that makes the NPV of the project equal to zero. The equation for the IRR of
Project A is:
0 = –$37,500 + $17,300/(1+IRR) + $16,200/(1+IRR)2 + $13,800/(1+IRR)3 + $7,600/(1+IRR)4
Using a spreadsheet, financial calculator, or trial and error to find the root of the equation, we find
that:
IRR = 19.71%
The equation for the IRR of Project B is:
0 = –$37,500 + $5,700/(1+IRR) + $12,900/(1+IRR)2 + $16,300/(1+IRR)3 + $27,500/(1+IRR)4
Using a spreadsheet, financial calculator, or trial and error to find the root of the equation, we find
that:
IRR = 18.76%
Examining the IRRs of the projects, we see that IRRA is greater than IRRB, so the IRR decision
rule implies accepting Project A. This may not be a correct decision however, because the IRR
criterion has a ranking problem for mutually exclusive projects. To see if the IRR decision rule
is correct or not, we need to evaluate the project NPVs.
b. The NPV of Project A is:
NPVA = –$37,500 + $17,300/1.11+ $16,200/1.112 + $13,800/1.113 + $7,600/1.114
NPVA = $6,330.67
And the NPV of Project B is:
NPVB = –$37,500 + $5,700/1.11 + $12,900/1.112 + $16,300/1.113 + $27,500/1.114
NPVB = $8,138.59
The NPVB is greater than the NPVA, so we should accept Project B.
(Please also see Homework 5 Excel Examples for computation on Excel)
Q3: NPV versus IRR: Bruin, Inc., has identified the following two mutually exclusive projects:
Year
Cash Flow
(A) Cash Flow (B)
0
1
2
3
4
−$40,500
18,000
16,000
14,800
10,600
−$40,500
6,000
12,700
16,000
30,500
a. What is the IRR for each of these projects? Using the IRR decision rule, which project should the
company accept? Is this decision necessarily correct?
b. If the required return is 12 percent, what is the NPV for each of these projects? Which project will
the company choose if it applies the NPV decision rule?
(Please follow above example to solve this question)
Chapter 10
Q4: In the context of capital budgeting, what is an opportunity cost?
Example for Question 5: Calculating Project Cash Flow from Assets: In the previous problem, suppose
the project requires an initial investment in net working capital of $250,000, and the fixed asset will
have a market value of $180,000 at the end of the project. What is the project’s Year 0 net cash flow?
Year 1? Year 2? Year 3? What is the new NPV?
Solution: The cash outflow at the beginning of the project will increase because of the spending on NWC.
At the end of the project, the company will recover the NWC, so it will be a cash inflow. The sale of
the equipment will result in a cash inflow, but we also must account for the taxes that will be paid on
this sale. So, the cash flows for each year of the project will be:
Year Cash Flow
0 –$2,570,000 = –$2,320,000 – 250,000
1 1,019,550
2 1,019,550
3 1,411,750 = $1,019,550 + 250,000 + 180,000 + ($0 – 180,000)(.21)
And the NPV of the project is:
NPV = –$2,570,000 + $1,019,550(PVIFA12%,2) + ($1,411,750/1.123)
NPV = $157,947.28
(Please also see Homework 5 Excel Examples for computation on Excel)
Q5: Calculating Project Cash Flow from Assets: In the previous problem, suppose the project requires
an initial investment in net working capital of $200,000, and the fixed asset will have a market value of
$175,000 at the end of the project. What is the project’s Year 0 net cash flow? Year 1? Year 2? Year 3?
What is the new NPV?
Please follow above example to solve this question)

You are writing a discussion post. Please see attachment for what needs to be done. Make sure you follow all instructions and use APA citations.

Some specific questions that should be answered are: • Start by sizing up the business situation • Before jumping into the calculations, analyze the expansion opportunities from a qualitative standpoint by clearly defining the pros and cons • Establish which cash flows are relevant for each company decision (a template has been provided) • Determine size and timing of the relevant cash flows for each of the proposed activities and calculate the estimated net cash flow for each project • Analyze the merits of each of the projects using the six capital budgeting tools explained in the related lecture and assuming cost of capital levels of 6%, 10%, and 14% • Focusing on the 10% cost of capital assumption, summarize your findings for the three projects and rank them in order of preference • Clearly explain your recommendations with regard to each of the projects to the company management and board of directors providing the reasons behind your recommendations and laying out not only the quantitative but also the qualitative considerations that led to your strategy. Assume MasterDecker pays a tax rate of 20%.

I want a solution for this case study.
I am attaching two files, the first is the case study and the second is the questions.
I want a solution so I can get the full mark. Please do not use artificial intelligence. Thank you.

The a-s-s-e-s-s-m-e-n-t will
Assignment Part2
Please see the questions shown in the screenshot. I will send you all the info after being hired, eg PPTs, student access etc. Please send a draft in 12hrs -1 day time, day 2, and day 3 as well. + Will need to draft some questions to ask the teacher and revise base on feedback (Send bk ard in 1 day max)

You are working at an investment bank as a financial analyst, and in your role, your manager has asked you to understand more about potential investment opportunities in a UAE company. You will select which UAE company to assess. Once you have done so, you will perform a DCF analysis of that company, so that your investment bank can better understand its valuation. You will provide a write-up of your findings to your manager. In your write-up of this company, you will do the following:
Clearly identify the company you are assessing
Perform a DCF analysis of the company, which should include
Calculating the 2019-2023 FCF
Forecasting the 2024-2029 FCF
Calculating the TV and NPV of the company
Be sure to follow these guidelines:
-** Do not put your name anywhere **on the assignment or on shared exhibits (Forum will track your submission). Your assignment will be graded blindly.
Be sure you submit a single PDF on Forum (do NOT submit Zip files).
Assume your audience is knowledgeable about the accounting/finance concepts we’ve covered in class and is familiar with the case facts. Don’t waste words explaining what financial concepts or terms mean from the course.
Go deep. When formulating a response, ask why. Then ask why again and justify your explanation. Back up your explanations with evidence. Integrate numbers into your arguments.
**Use no more than two significant digits **for all numbers in the text and exhibits (12%, 3.5%, or 0.46%, not .12480294). Less is more. Displaying too many digits makes numbers hard to read and actually obscures its value and intuition.
All exhibits you create yourself and referenced in your write-up must be included in the write-up itself and be properly formatted. You must also include a link to all your exhibits so that your calculations can be seen and checked (only those exhibits that appear in the write-up and are explicitly discussed will be assessed). Place your link at the very beginning of the write-up and be sure to grant your professor viewing privileges. Follow these guidelines (e.g. avoid including numbers in a calculation cell but instead, reference inputs/assumptions cells that do contain numbers; use black text for calculations and blue text for inputs).
Check your spelling and grammar. Poor writing conveys carelessness and unprofessionalism.
The course-related LO’s that are #valuation (x2) and #bizfunctions (x1) will be graded based on your answers to the 3 questions above, with each corresponding to a specific LO as described below.
In addition to this, use and tag the following GLO’s wherever appropriate: #modeling and #estimation.
Add a word count at the end of the assignment (exclude exhibits, footnotes, and the bibliography).
For assignment deadline extensions please refer to the policies section written at the end of the course syllabus.
Assignment Information
Length:
1000 to 1250 words
Weight:
15%
Learning Outcomes Added
Valuation: Calculate the value of a financial asset.
BizStrategy: Formulate and analyze business strategy.
Based on your DCF analysis, determine whether or not this company is a worthwhile investment for your firm and explain your rationale
IMPORTANT NOTES:
Choose a public company traded in the stock market of the country you are residing in right now.
To assist you in selecting a company, please refer to the listed companies in the Abu Dhabi Securities Exchange (list) and the Dubai Financial Market (list). You should select a company that has at least 4 years of available data in Bloomberg (please ensure that you can find the data before selecting the company).
In your DCF analysis, to arrive at an appropriate valuation: Estimate FCF for 2023 (assume 2023 as Year 0 and include it in your valuation), project it over the next five years (2024-2029), and estimate a terminal value if you think the store will continue indefinitely (estimate a reasonable terminal growth rate).
Calculate your own WACC. Use CAPM to calculate the cost of capital. Assume a beta based on the systematic risk by looking up betas of public companies that are in the same industry and geography (Yahoo Finance shows equity betas which you will need to adjust by using Hamada’s Equation to account for the public companies’ debt; this is because you need an asset beta for your store given the assumption of no debt) or estimate your own beta using market data.
Be sure you justify the key assumptions (revenue growth rate, working capital changes, terminal growth rate etc.).
For your write-up, focus on stating and justifying your assumptions, discussing each valuation result, comparing the results across the techniques, and comparing them with recommendation(s) made by the financial analyst(s) (if available).
Your valuation techniques and estimation approach could be explained further in an Appendix.
Your models and calculations should be submitted as a google sheet. The assumptions and given values should be colored blue and your calculations should be in black. Leave the formulas and links as is. The grader should be able to follow your calculations.
You will need to attach your Bloomberg Lab data download as part of your submission.
The course-related LO’s that are #valuation (x2) and #bizstrategy (x1) will be graded based on your answers to the questions above, with each corresponding to a specific LO as described below.
In addition to this, use and tag the following GLO’s wherever appropriate: #modeling and #estimation
If you have any questions about this assignment, contact the Professors immediately.

Module 10: Critical Thinking Assignment Capital Budgeting Justification Capital budgeting is an essential process for healthcare organizations. The challenge in quality and patient safety organizations is proving return on the capital investment without revenue impacts. Select a capital investment that you would recommend making for a patient safety concern. In a 10-12 slide PowerPoint Presentation address the following requirements: • Describe the capital item in detail: o Item description o Rationale for selection o Cost-benefit analysis • Complete a capital budget with projected financial benefit: o Revenue or positive financial impact o Capital equipment cost o Personnel cost o Supply cost • Review financial ratios o Return on investment o Net Present Value o Cash Payback period • Make a recommendation to lease or finance the capital item. Please support your decision with financial data. Your presentation should meet the following structural requirements: • Be 10-12 slides in length, not including the title or reference slides. • Be formatted according to Saudi Electronic University and APA writing guidelines. • Provide support for your statements with citations from a minimum of six scholarly articles. These citations should be listed in the Notes section of the slide in which they appear. Two of these sources may be from the class readings, textbook, or lectures, but four must be external. Each slide must provide detailed speaker’s notes to support the slide content. These should be a minimum of 100 words long (per slide) and must be a part of the presentation. The presentation cannot be submitted in PDF format, which does not make notes visible to the instructor. Notes must draw from and cite relevant reference materials.

I’m an implementation consultant for a fintech company currently with an undergrad in psychology.
I have also worked for Wells Fargo for over 5 years whilst completing my undergrad at University of Houston. Please include how I would be a great fit in the Ms program in finance.
Please make it stand out. I have attached my resume as well. Also be sure to include how my experience working in banking and fintech makes me a great fit in the finance program at Univeristy of Houston MS Finance program. Here is a link https://www.bauer.uh.edu/msfinance/about.php?j=20186669&sfmc_sub=533504072&l=84_HTML&u=510179083&mid=7215661&jb=1402, please refer to the link for more information on the program.