Talk about NPV and IRR, as according to NPV, the company needs to wait 3 years instead of buying equipment now. Describe how both were calculated and note anything important about your findings. Then, talk about how sensitive was the analysis to the choice of discount rate? Discuss the relation between NPV and discount rate […]
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Discuss whether the Star River Electronics Ltd. should buy an equipment now or wait three years.
Description Read one-page HBS case and memo, which discuss whether the Star River Electronics Ltd. should buy an equipment now or wait three years. The attached calculations review the historical performance of the firm, forecast financing requirements for the next two years, estimate Star River’s weighted average cost of capital. The only thing that is […]
How many months will it take to pay off a $10,000 balance on a credit card that has an APR of 18%, assuming you charge no additional money on the card and make regular monthly payments of $175? hint: you need to use the Excel NPER function and enter the payment as a negative number.
TVM Excel Problems — Valuation of Future Cash Flows 1. What is the implied discount rate in an annuity product that costs $50,000 today and pays the owner twenty annual payments of $3,000? hint: you need to use the Excel RATE function and enter the payment as a negative number. 2. How many months will […]
