| | | | Ashford University ACC206 |
| | | | Guidance Report |
| | | | Week Five |
| | LISTEN TO AUDIO/VIDEO EXPLAINING THE GUIDANCE REPORT | | | Guidance Report Download Date | | 11/28/17 | Guidance Report Revision Date | | 12/1/17 |
| | | | | YELLOW INDICATES ACCOUNT AMOUNTS CHANGED |
| | | | | Change Account to: |
| | | | | Change to: Based Upon Course Start Date |
| | Exercise/
Problem | Account to
be changed | Original
Amount
| Jan - Feb | Mar - Apr | May - Jun | Jul - Aug | Sep - Oct | Nov - Dec |
| | Ch 8 Ex 1 | Part A - Year 5 - Single cash flow | 12000 | 12100 | 12200 | 12300 | 12400 | 12500 | 12600 |
| | | Part B -Yearly amount - Annual receipt | 16000 | 16100 | 16200 | 16300 | 16400 | 16500 | 16600 |
| | | Part C - End of year 1 - Single receipt | 15000 | 15100 | 15200 | 15300 | 15400 | 15500 | 15600 |
| | | Part D - Annual receipt year 1 | 8000 | 8000 | 8150 | 8300 | 8450 | 8600 | 8750 |
| | | Questions | YOUR ANSWERS BASED UPON COURSE START DATE |
| | | Single cash flow: |
| | | (Note: Use Excel NPV, enter rate and use a column with a zero amount for years 1-4(row 1-4)and 12000 entered in year 5(row 5) |
| | | Annual receipt: |
| | | (Note: Use Excel PV function.) |
| | | Single receipt: |
| | | (Note: use NPV and same approch as above.) |
| | | Annual receipt: |
| | | (Note: use NPV and same approch as above.) |
| | AUDIO/VIDEO EX 5 <<<<CLICK HERE |
| | Ch 8, Ex 3 | Account to
be changed | Original
Amount | Jan - Feb | Mar - Apr | May - Jun | Jul - Aug | Sep - Oct | Nov - Dec |
| | | Year 1 | 15000 | 16000 | 17000 | 18000 | 19000 | 19500 | 18500 |
| | | | YOUR ANSWERS BASED UPON COURSE START DATE |
| | | Compute the net present value of the proposed investment. |
| | | Considering the time value of money , should Contempo acquire the new equipment? Why? |
| | | Account to
be changed | Original
Amount | Jan - Feb | Mar - Apr | May - Jun | Jul - Aug | Sep - Oct | Nov - Dec |
| | Ch 8, Pb 3 | Number of games | 50 | 52 | 54 | 56 | 58 | 60 | 62 |
| | | | YOUR ANSWERS BASED UPON COURSE START DATE |
| | | Revenue per year-class 1 |
| | | Revenue per year-class 2 |
| | | Total revenue |
| | | Total yearly expenses (Added extra costs per game minus depreciation) X (# of games) |
| | | Cash flow year 1(Inflows- expenses) |
| | | Cash flow year 2 |
| | | Cash flow year 3 |
| | | Cash flow year 4 |
| | | Net Present value |
| | | Present value of residual: |
| | | Year 1 |
| | | Year 2 |
| | | Year 3 |
| | | Year 4 |
| | | NPV |
| | | Total Present value Calculation: |
| | | NPV Cash Inflows |
| | | NPV of residual: |
| | | Cost of Arena |
| | | Total Net Present Value |
| | | In addition to the cash flows presented here, what other cash flows might change if the Eskimos add on to the arena? |
| | Ch 8, Pb 4 |
| | | Account to
be changed | Original
Amount |
| | | | | Jan - Feb | Mar - Apr | May - Jun | Jul - Aug | Sep - Oct | Nov - Dec |
| | | Old equipment-Yearly operating costs | 27200 | $ 27,400 | $ 27,600 | $ 27,800 | $ 28,000 | $ 28,200 | $ 28,400 |
| | | New equipment-Yearly operating costs | 21000 | $ 21,350 | $ 21,700 | $ 22,050 | $ 22,400 | $ 22,750 | $ 23,100 |
| | | | YOUR ANSWERS BASED UPON COURSE START DATE |
| | | Keep Equipment: |
| | | Year 1 costs |
| | | Year 2 cost |
| | | Year 3 costs |
| | | Year 4 costs |
| | | Year 5 costs |
| | | Year 6 costs |
| | | Net Present Value of costs |
| | | Note: Disregard the sale amount, that will be used if we buy new equipment. Instead treat the residual value as the final cash inflow. |
| | | Buy Equipment: |
| | | Year 1 costs |
| | | Year 2 costs |
| | | Year 3 costs |
| | | Year 4 costs |
| | | Year 5 costs |
| | | Year 6 costs |
| | | Net Present Value of costs |
| | | Add purchase amount |
| | | Add sale amount |
| | | Net Present Value of costs |
| | | Note: The yearly costs are added and are a negative cash flow. The cost of the new machine is also negative and the sale of the equipment is positive. Both the purchase and sale are treated as cash flows as of today. |
| | | Columbia's management believes that the time value of money should be considered in all long-term decisions. Briefly discuss the rationale that underlies management's belief. |
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ACC206WeekFiveGuidanceReport.xlsx
