Please note,
We’ll need to show all work in a formula, including in the Excel file.
Regarding the Tokyo Olympics questions. We will need to write a business analysis acompanying our calculations, based on whether or not the investment opportunity should be pursued.
If references are utilized, they should be listed in APA7
Watch the two videos, and answer the following questions,
Submission:
Calculating NPV and IRR
https://www.youtube.com/watch?v=FaLzZ-6Zf0I
Businesses use NPV and IRR to
determine whether a project will add-value for shareholders. After watching the
CFA Level I Corporate Finance video, answer the following questions.
1. According to the video, how should a company use NPV
and IRR to decide whether a project should be undertaken?
2. In the video, Trim Corp. is considering a project that
is expected to have cash inflows of $350, $250, and $150 in years 1, 2, and 3,
respectively. What do you think would happen to the NPV of the project if the
company expected the same cash flows, but in reverse order? In other words,
what do you think would happen to the NPV of the $150 were the cash inflow in
year 1, $250 were the cash inflow for year 2, and $350 were the cash inflow for
year 3? Using the same discount rate as in the video, 25%, calculate the NPV
for the project with this string of cash outflows.
The Tokyo Olympics
Watch the following video that pertains to the Tokyo 2020 Olympics.
These Olympics were delayed a year by COVID-19, and were already the
most expensive summer games in history. Experts estimate they will cost
more than $26 billion. The extra year added at least another $2.8
billion.
After watching How the Tokyo
Olympics Became the Most Expensive Summer Game Ever video answer the following
questions.
3. As you saw in the video, the capital investment a city
must undertake to host the Olympic Games is massive. Given the costs discussed
in the video, create and Excel spreadsheet to estimate the NPV and IRR of hosting
the Olympic Games for the city.
4. How would the number in your Excel spreadsheet change
because of the COVID-19 pandemic? Create a NPV profile for Tokyo’s Olympic
Games given the changes that were caused by the pandemic.
Check Before Submission:
Before submitting, double-check, have you have
met the criteria noted below. Did you….
Identify correct calculations and formulas for the
NPV & IRR
Include the logical answers for each question.
Utilize the financial formulas application in
your Excel spreadsheet.
Implement course materials and research
materials to support your formulas.
Check for accuracy in composition, APA format,
and meeting the guidelines as delineated step 2.
