Purpose of Assignment :
The purpose of this assignment is for students to employ capital budgeting techniques using time value of money concepts to determine the acceptability of large dollar value assets.
Your company has $440,000 to invest in one of the following:
Company 2: You are determining whether to purchase another company or firm. A firm has projected free cash flows of $40,000 for Year 1, $60,000 for Year 2, 80,000 for Year 3, 100,000 for Year 4, and 120,000 for Year 5. The projected terminal value at the end of Year 5 is $300,000. The firm’s Weighted Average cost of Capital (WACC) is 12.0%. $440,000 Investment.
Discounted Cash Flow (DCF)
Create a Microsoft® Excel® document to determine the Discounted Cash Flow (DCF) value under each scenario for the information provided above. Show calculations.
In addition, explain using Microsoft® Word® what is the highest level of initial investment you would make to purchase each company? Why? Give a complete explanation of the highest dollar amount you would be willing to invest for these returns.—
The post Purpose of Assignment :
The purpose of this assignment is for students to employ appeared first on Homeworkassisters.