Expert answer:Business excel assignment
Expert answer:start on this assignment, anyone can help me do it. the homework requirement is “project 2.pdf”.and I will give you some example below in fils. please finish it before 11/24/2017 night. Let me know if you have some question.
project_2.pdf
tutorial_solutions.xlsx
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Financial Management
Capital Budgeting&Risk and Return
General Instructions:
This is a group case, be sure each group members name is clearly stated in the spreadsheet that you submit. You are
responsible for forming your own group. No individual assignments will be accepted for any reason, nor will names
be added to cases after they are turned in. Late assignments will suffer a non-negotiable severe grade penalty for all
group members and will not be accepted more than 24 hours late.
Case Instructions: Begin a new spreadsheet in Excel and save the file as “capitalbudgeting.xls”. Be sure to follow
instructions carefully and label each individual answer. You will lose points and potentially not receive credit due to a
lack of organization. Solve for the following questions using Excel functions, unless otherwise noted. Be sure to
answer all questions clearly.
1.
Ross Inc.’s CFO thinks the company should rely primarily on the NPV method, but the president prefers the IRR,
so decisions are based on the IRR. The CFO wants you to show the president that at times decisions based on the
IRR result in a reduction in the company’s value relative to its value if the NPV criterion were used. The CFO
then asked you to analyze two projects that the company is now considering, S and L, whose cash flows are
shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by
choosing the project with the higher IRR, how much value will Ross be foregoing? Be sure to report the IRR and
NPV for both projects, using Excel functions, as part of your final answer.
WACC = 13%
Year:
CFS:
CFL:
0
($1,500.00)
($1,500.00)
1
$1,050.00
$550.00
2
$875.00
$625.00
3
$0.00
$750.00
4
$0.00
$300.00
Case Instructions:
Begin a new spreadsheet in Excel and save the file as “riskreturn.xls”. Be sure to follow instructions carefully and
label each individual answer. You will lose points and potentially not receive credit due to a lack of organization.
Read all instructions carefully.
1.
Within “riskreturn.xls” create a spreadsheet named “risk”. Use it to solve for the following (A&B):
A. You’ve decided to invest $25000 in each of the following four stocks to form a portfolio: Google, Ford, Exxon
and Amazon. Separately, you will invest $100000 in the Vanguard 500 index fund. You “buy” at the close
prices at the earliest date given in table. When you calculate the number of shares you can buy at that closing
price, round down to the nearest whole share.
You will do the following within the required table (appears below):
i. Given the following historical data for these four stock prices as well as the close prices for the Vanguard
500 Index mutual fund, calculate the dollar value of each stock, as well as your total portfolio value, and the
value of the Vanguard for each week. Remember you can only buy whole shares, and need to round down to
the nearest whole share when you “buy”
ii. Calculate weekly returns for your portfolio and for the Vanguard. (see tutorial for calculations)
iii. Then, using Excel functions (“average” and “stdev”) calculate the mean weekly return and the standard
deviation of the returns for your portfolio and the Vanguard. Look at the help section within Excel for the
functions if necessary. The tutorial provided with this learning module explains how you can check your
answers using your calculator.
Given price data ($):
Date
Exxon
Amazon.com
2/22/2011
85.34
177.24
2/28/2011
85.08
171.67
3/7/2011
82.12
168.07
3/14/2011
80.85
161.82
3/21/2011
83.62
170.98
3/28/2011
84.68
180.13
4/4/2011
85.95
184.71
4/11/2011
83.18
180.48
Google
610.04
600.62
576.71
561.06
579.74
591.8
578.16
570.61
Ford
Vanguard
15.07
121.92
14.42
122.06
14.36
120.58
14.49
118.27
15.01
120.98
15.16
122.73
15.33
122.4
14.91
121.12
Required table: You should copy and paste, or retype, the required table into Excel.
$Value of Exxon
Date
$Value of
Amazon
$Value of
Google
$Value of Ford $Value of
portfolio
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2/22/2011
Portfolio
weekly
return %
N/A
$Value
Vanguard
2/28/2011
3/7/2011
3/14/2011
3/21/2011
3/28/2011
4/4/2011
4/11/2011
Mean weekly N/A
return
Standard deviation N/A
N/A means Not Applicable–don’t try to calculate it.
Vanguard
weekly
return %
N/A
Required Questions: (to be answered in paragraph format) Compare the results from your portfolio of four stocks
to the results of the Vanguard 500 both in terms of returns and standard deviation of those returns. Think about
diversification and what you would expect versus what happened considering the Vanguard 500 is a good proxy
for the overall market. Answer questions such as: Which was riskier, your portfolio or the Vanguard? Does that
meet your expectations? Does the performance (returns) make sense if you think about diversification? If your
expectations are not met, explain why that might be. Please do not discuss any of the individual stocks, only
discuss the performance of your portfolio as a whole, as well as the Vanguard.
B. You analyze the prospects of several companies and come to the following conclusions about the
expected return on each:
Stock
Expected Return
Starbucks
6%
Sears
4%
Microsoft
9%
Limited Brands
6%
You decide to invest $6000 in Starbucks, $5000 in Sears, $9000 in Microsoft, and $7000 in Limited Brands.
What is the expected return (in percentage terms) on your portfolio? Be sure to show your calculations in
Excel, you do not need to use a function; you can simply set up the math in the spreadsheet.
1a.
0
1
2
3
4
5
($240,000)
$80,000
$20,000
$70,000
$55,000
$30,000
15.00%
r
npv
($62,924.04)
1b
0
1
2
3
4
($160,000)
$30,000
($20,000)
$250,000
($15,000)
r
10.00%
npv
$28,327.30
2a
0
1
2
3
4
5
($360,000)
$130,000
($20,000)
$150,000
($10,000)
$160,000
irr
4.26542%
3
Year 0
+ Revenues
-Costs
– Deprec
= EBIT
– Taxes
=Net Income
+ Deprec
Year 1
Year 2
Year 3
Year 4
Year 5
85000
85000
85000
85000
85000
22000
22000
22000
22000
22000
26000
26000
26000
26000
26000
37000
37000
37000
37000
37000
11840
11840
11840
11840
11840
25160
25160
25160
25160
25160
26000
26000
26000
26000
26000
= Oper. CF
– D in NWC
– Capital Ex.
– Opp. Costs
= Net CF
npv
8000
130,000
100,000
-238,000
51160
51160
51160
51160
51160
-8000
51160
51160
51160
51160
59160
-$44,170.30 reject
…
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