Step 1: Watch the Videos
CFA Level I Corporate Finance – NPV and IRR
Watch the video: CFA Level I Corporate Finance – NPV and IRR
How the Tokyo Olympics Became the Most Expensive Summer Games Ever
Watch the video: Tokyo Olympics Cost
Step 2: Review the Final Assessment Guide
Review the attached “Final Assessment Outline” carefully to understand the requirements and structure of your submission.
Step 3: Answer Questions on NPV and IRR
How should a company use NPV and IRR to decide whether a project should be undertaken?
NPV (Net Present Value): If NPV is positive, the project is expected to add value to the company and should be considered. If NPV is negative, the project is expected to reduce value and should be rejected.
IRR (Internal Rate of Return): If IRR exceeds the required rate of return or cost of capital, the project should be undertaken. If IRR is less than the required rate of return, the project should be rejected.
Calculate NPV for Trim Corp’s project with reversed cash flows
Original cash flows: $350 (Year 1), $250 (Year 2), $150 (Year 3)
Reversed cash flows: $150 (Year 1), $250 (Year 2), $350 (Year 3)
Discount rate: 25%
Calculate NPV for both scenarios using the formula:
NPV
=
∑
(
Cash flow
(
1
+
𝑟
)
𝑡
)
NPV=∑((1+r)tCash flow)
Step 4: Analyze the Tokyo Olympics Cost
Estimate the NPV and IRR for hosting the Olympic Games
Create an Excel spreadsheet to input the costs and revenues associated with hosting the Olympics.
Use the NPV and IRR formulas to estimate the financial impact.
Impact of COVID-19 on NPV profile
Adjust the Excel spreadsheet to include additional costs and delays caused by the pandemic.
Create a new NPV profile reflecting these changes.
Step 5: Prepare PowerPoint with Voiceover
Presentation Content:
Introduction
NPV and IRR concepts
Calculations for Trim Corp’s project
Analysis of Tokyo Olympics cost
Impact of COVID-19 on the Olympics
Conclusion
PowerPoint Design:
Use clear and concise slides.
Include charts, graphs, and tables to visualize data.
Practice your voiceover to ensure clarity and professionalism.
Step 6: Submission Checklist
Ensure you have:
Correct calculations and formulas for NPV & IRR.
Logical answers for each question.
Financial formulas applied correctly in your Excel spreadsheet.
Used course materials and research materials to support your formulas.
Checked for accuracy in composition, APA format, and guidelines.
Practiced and articulate materials in a professional manner.
Tools and Resources
Excel: For calculations and NPV/IRR analysis.
PowerPoint: For creating the presentation with voiceover.
Research Materials: Course textbooks, notes, and relevant financial resources.
