The Acme Company has its European subsidiary based in the Euro zone. The subsidiary must solve a series of five problems that require you to apply the concept of “time value of money,” or TVM. The five problems are listed below. Solving them will require the use of Microsoft Excel. Before you begin your work, each student is to select a unique nine-digit random number that contains no zeros, no “patterns,” and should use most of the digits between one and nine. This value will be referred to as the student unique number (SUN). Further, digits within the SUN are read from left to right. For example, if the SUN = 123456789, the first digit = 1, the second digit = 2, etc. You are not authorized to use 123456789. To generate a random whole number between 1 and 9, use this excel formula:
When you have generated these 9 digits, paste them back onto themselves using the Paste Values option of the Paste command. Please note that the interest rate used in all questions represents an annual rate and all Euro figures are in whole Euros (not Euros and cents).
1. Acme plans to construct a new manufacturing facility in 14 years. If Acme estimates that today’s cost of the new plant is SUN Euros (use all 9 digits) and annual inflation is A% (A = the first digit of SUN), how much will the manufacturing plant cost in 14 years? Give a detailed explanation on your calculations.
2. Acme has decided to establish a sinking fund for its outstanding preferred stock issue. SUN (use all 9 digits) represents the amount of the issue that will be retired in 26 years. At the beginning of each of these 26 years, Acme will deposit an equal amount into an account that earns B% (B = the second digit of SUN). What is the value of this periodic deposit? Give a detailed explanation on your calculations.
3. One of Acme’s new projects will generate the following cash flows at the end of each of the stated years: year 2 = SUN digits 1-3; year 4 = SUN digits 4-6; year 7 = SUN digits 7-9. If these cash flows are discounted at 12%, what is the sum of their present values? Give a detailed explanation on your calculations.
4. Acme is assessing its employee pension fund. At the end of each of the next 25 years Acme will have to pay its retirees (use the first 4 digits of your SUN). If the fund is estimated to earn D% (D = the fourth digit of SUN), how much does Acme need to have set aside today to ensure that it can meet its future obligations? (At the end of the 25th year, the balance should be drawn down to zero.) Give a detailed explanation on your calculations.
5. As part of a new labor contract, Acme has agreed to make a one-time contribution of Euros 1,000,000 to the construction of a new physical fitness facility for its employees. This amount will be placed in an account earning E% (E = the fifth digit of SUN). When the account grows to Euros 1,850,000, construction will commence. How long must employees wait until construction of their new gym begins? (Your answer should be accurate to two decimal places, e.g., 1.57 years). Give a detailed explanation on your calculations.
Prepare for Acme’s CFO an analysis that contains solutions for all five problems. Be sure to clearly present and label all values and variables, provide Excel TVM formulas, and conclude each question with a detailed interpretation of your results. Your entire submission must be contained within an Excel document. (Note: You must use Excel TVM functions to complete this assignment; using a hand calculator or Web site and plugging values into a template is not acceptable.) Note: The books of the subsidiary being held in Euros, the exchange rate Euro/US dollars has no influence on the result of the exercise.
At 111papers.com, we value all our customers, and for that, always strive to ensure that we deliver the best top-quality content that we can. All the processes, from writing, formatting, editing, and submission is 100% original and detail-oriented. With us, you are, therefore, always guaranteed quality work by certified and experienced writing professionals. We take pride in the university homework help services that we provide our customers.
As the best homework help service in the world, 111 Papers ensures that all customers are completely satisfied with the finished product before disbursing payment. You are not obligated to pay for the final product if you aren’t 100% satisfied with the paper. We also provide a money-back guarantee if you don’t feel that your paper was written to your satisfaction. This guarantee is totally transparent and follows all the terms and conditions set by the company.Read more
All products that we deliver are guaranteed to be 100% original. We check for unoriginality on all orders delivered by our writers using the most advanced anti-plagiarism programs in the market. We, therefore, guarantee that all products that we submit to you are 100% original. We have a zero-tolerance policy for copied content. Thanks to our strict no plagiarized work rule, you can submit your homework to your professor without worrying.Read more
TThis is one of the most cherished courtesy services that we provide to help ensure that our customers are completely satisfied with our finished products. Delivering the best final product to our customers takes multiple inputs. 111papers.com prides itself on delivering the best university homework help services in the writing industry. And, in part, our free revision policy is how we do it. What’s more, all our revisions are 100% free without any strings attached.Read more
Client privacy is important to use. We know and understand just how important customers value their privacy and always want to safeguard their personal information. Thus, all the information that you share with us will always remain in safe custody. We will never disclose your personal information to any third party or sell your details to anyone. 111 Papers uses the most sophisticated, top-of-the-line security programs to ensure that our customers’ information is safe and secured.Read more
Placing your order with us means that you agree with the homework help service we provide. We, in turn, will endear to ensure that we do everything we can to deliver the most comprehensive finished product as per your requirements. We will also count on your cooperation to help us deliver on this mandate. Yes, we also need you to ensure that you have the highest-quality paper.Read more