Myntillae Nash
Introduction to Financial Management
Prof. Crawford
Questions for Sheetbend & Halyard, Inc.
1. Project the silver flows for the navy duffel canvas regard for years 0 through 5.
Be sure to take into account the three main move of a project valuation: initial costs, annual cash flows, and ending honor. As you do so, make the following assumptions (in appendix to those already mentioned in the case):
a. The forecasts in Table 8-6 are accu order, chuck out that depreciation should be calculated according to the MACRS schedules.
b. The $1.5 million volunteer for the let down and plant represents the propertys true current market value (i.e., what it could be sold for) and the best envision of its market value in 5 years.
For initial costs, hark back to include cash flows for the cost of the land, plant, and machinery. The opportunity cost of the land should be included as part of your initial costs. (Note that if S&H opted to sell the land, there would be task consequences associated with the sale.) withal remember to account for investment in working(a) capital.
For terminal value, remember to include cash flows for selling or paper off the land, plant, and machinery at the conclusion of the project. (Dont forget the tax consequences.
) Also remember to account for the freeing up of working capital at the end of the project.
Note: Although you could do these projections with pencil, paper, and calculator, you should do this on an Excel spreadsheet. Attach the spreadsheet with your projections to your report.
2.What is the net present value of the navy duffel canvas project? What is the IRR of the project? establish on the assumptions that have been made, should S&H accept the project?
NPV= 733
IRR= 6.8%
Yes we would because the NPV is positive and also there is a 6.8 return rate on your initial investment
2. Perform some sensitivity analysis...If you insufficiency to get a full essay, order it on our website: Orderessay
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