Expert Answer:FINA 6216 Mutual Fund Services Investment in Inves

  

Solved by verified expert:Find out the below values using the data in excel sheet NPV (Net Preset value) IRR Internal Rate of Return) MIRR (Modified Internal Rate of return)Please do the calculations in Excel sheet so i can see how it is done (MS word work will not be acceptable
investoanalysis_on_line2015_student.xls

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Exhibit 1
Mutual Fund Services Investment in Investo
Investco Manufacturing Projections
Model Inputs:
Total Market Size
Market Growth After Year One
First Year Market Share
Market Share After Year One
Selling Price per Unit
Cost of Goods Sold per Unit
WACC
Marginal Tax Rate
Terminal Growth Rate
Cost of Investment
Increase in NWC (% of Sales Change)
MFS Share of Manufacturing Value
1,000
6.00%
5.00%
10.00%
$50,000
$30,000
15.00% Applies to both parts of project
40.00%
5.00%
$10,500,000
5.00%
30.00%
Investo
Manufacturing
Projected Income Statement
Year
Selling Price per Unit
Cost of Goods Sold per Unit
Expected Unit Sales
Sales Revenue
Cost of Goods Sold
Gross Profit
S,G,&A Expenses
Depreciation Expense
Earnings Before Taxes
Income Tax Expense
Net Income
1
$50,000
$30,000
50
$2,500,000
$1,500,000
$1,000,000
$300,000
$100,000
$600,000
$240,000
$360,000
2
$50,000
$30,000
106
3
$50,000
$30,000
112
4
$50,000
$30,000
119
$5,300,000
$3,180,000
$2,120,000
$320,000
$100,000
$1,700,000
$680,000
$1,020,000
$5,600,000
$3,360,000
$2,240,000
$330,000
$100,000
$1,810,000
$724,000
$1,086,000
$5,950,000
$3,570,000
$2,380,000
$340,000
$100,000
$1,940,000
$776,000
$1,164,000
1
$360,000
$100,000
$125,000
$335,000
2
$1,020,000
$100,000
$140,000
$980,000
3
$1,086,000
$100,000
$15,000
$1,171,000
$335,000

$980,000
$1,171,000
4
$1,164,000
$100,000
$17,500
$1,246,500
$13,088,250
$14,334,750
Projected Cash Flow Statement
Year
Net Income
Add back depreciation
Less increase in working capital
Cash Flow from Operations
Terminal Value
Cash Flow
Present Value (At time zero)
$9,998,216
Exhibit 2
Mutual Fund Services Investment in Investo
Mutual Fund Services Marketing of Investo Product
Mutual Fund Services
Marketing of Investo Product
Projected Income Statement
Year
Selling Price per Unit
Transfer Price per Unit
Expected Unit Sales
Sales Revenue
Cost of Goods Sold
Gross Profit
S,G,&A Expenses
Depreciation Expense
Earnings Before Taxes
Income Tax Expense
Net Income
1
$65,000
$50,000
50
$3,250,000
$2,500,000
$750,000
$200,000
$40,000
$510,000
$204,000
$306,000
2
$65,000
$50,000
106
$6,890,000
$5,300,000
$1,590,000
$210,000
$40,000
$1,340,000
$536,000
$804,000
3
$65,000
$50,000
112
$7,280,000
$5,600,000
$1,680,000
$220,000
$40,000
$1,420,000
$568,000
$852,000
4
$65,000
$50,000
119
$7,735,000
$5,950,000
$1,785,000
$230,000
$40,000
$1,515,000
$606,000
$909,000
Projected Cash Flow Statement
Year
Net Income
Add back depreciation
Less increase in working capital
Cash Flow from Operations
Terminal Value
Cash Flow
Present Value (At time zero)
1
$306,000
$40,000
$162,500
$183,500
2
$804,000
$40,000
$182,000
$662,000
3
$852,000
$40,000
$19,500
$872,500
$183,500
$662,000
$872,500
$7,324,059
4
$909,000
$40,000
$22,750
$926,250
$9,725,625
$10,651,875

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