Finance paper in Excel Spreadsheet

Should be completed in Excel Spreadsheet.

Conch Republic Electronics

Conch Republic Electronics is a mid sized electronics manufacturer located in Key West, Florida. The company president is Shelley Couts, who inherited the company. When it was founded over 70 years ago, the company originally repaired radios and other household appliances. Over the years, the company expanded into manufacturing and is now a reputable manufacturer of various electronic items. Jay McCanless, a recent MBA graduate, has been hired by the company’s finance department.

One of the major revenue-producing items manufactured by Conch Republic is a personal digital assistant (PDA). Conch Republic currently has one PDA model on the market, and sales have been excellent. The PDA is a unique item in that it comes in a variety of tropical colors and is preprogrammed to play Jimmy Buffett music. However, as with any electronic item, technology changes rapidly, and the current PDA has limited features in comparison with newer models. Conch Republic developed a prototype for a new PDA that has all the features of the existing PDA but adds new features such as cell phone capability. The company has performed a marketing study to determine the expected sales figures for the new PDA.

Conch Republic can manufacture the new PDA for $200 each in variable costs. Fixed costs for the operation are estimated to run $4.5 million per year. The estimated sales volume is 70,000, 80,000, 100,000, 85,000, and 75,000 per each year for the next five years, respectively. The unit price of the new PDA will be $340. The necessary equipment can be purchased for $16.5 million and will be depreciated on a 5 year straight-line schedule.

Net working capital investment for the PDAs will be $6,000,000 the first year of operations.  Of course NWC will be recovered at the projects end.  Conch Republic has a 35 percent corporate tax rate and a 12 percent required return.

Shelly has asked Jay to prepare a report that answers the following questions:

1.     What is the IRR of the project?

2.     What is the NPV of the project, based on the required rate of return of 12%?

Should

be completed in Excel Spreadsheet.

Conch

Republic Electronics

Conch Republic Electronics is a mid sized electronics manufacturer located in

Key West, Florida

. The company president is Shelley Couts, who inherited the

company. When it was founded over 70 years ago, the company originally

repaired radios and other household appliances. Over the years, the company

expanded into manufacturing and is now a reputabl

e manufacturer of various

electronic items. Jay McCanless, a recent MBA graduate, has been hired by

the company’s finance department.

One of the major revenue

–

producing items manufactured by Conch Republic

is a personal digital assistant (PDA). Conch Repub

lic currently has one PDA

model on the market, and sales have been excellent. The PDA is a unique

item in that it comes in a variety of tropical colors and is preprogrammed to

play Jimmy Buffett music. However, as with any electronic item, technology

chang

es rapidly, and the current PDA has limited features in comparison with

newer models. Conch Republic developed a prototype for a new PDA that has

all the features of the existing PDA but adds new features such as cell phone

capability. The company has perf

ormed a marketing study to determine the

expected sales figures for the new PDA.

Conch Republic can manufacture the new PDA for $200 each in variable

costs. Fixed costs for the operation are estimated to run $4.5 million per year.

The estimated sales volum

e is 70,000, 80,000, 100,000, 85,000, and 75,000

per each year for the next five years, respectively. The unit price of the new

PDA will be $340. The necessary equipment can be purchased for $16.5

million and will be depreciated on a 5 year straight

–

line s

chedule.

Net working capital investment for the PDAs will be $6,000,000

 

the first year

of operations.

 

Of course NWC will be recovered at the projects end.

  Conch

Republic has a 35 percent corporate tax rate and a 12 percent required return.

Shelly has as

ked Jay to prepare a report that answers the following questions:

1.

What is the IRR of the project?

2.

What is the NPV of the project, based on the required rate of return of 12%?

Should be completed in Excel Spreadsheet.

Conch Republic Electronics

Conch Republic Electronics is a mid sized electronics manufacturer located in
Key West, Florida
. The company president is Shelley Couts, who inherited the
company. When it was founded over 70 years ago, the company originally
repaired radios and other household appliances. Over the years, the company
expanded into manufacturing and is now a reputabl
e manufacturer of various
electronic items. Jay McCanless, a recent MBA graduate, has been hired by
the company’s finance department.

One of the major revenue
–
producing items manufactured by Conch Republic
is a personal digital assistant (PDA). Conch Repub
lic currently has one PDA
model on the market, and sales have been excellent. The PDA is a unique
item in that it comes in a variety of tropical colors and is preprogrammed to
play Jimmy Buffett music. However, as with any electronic item, technology
chang
es rapidly, and the current PDA has limited features in comparison with
newer models. Conch Republic developed a prototype for a new PDA that has
all the features of the existing PDA but adds new features such as cell phone
capability. The company has perf
ormed a marketing study to determine the
expected sales figures for the new PDA.

Conch Republic can manufacture the new PDA for $200 each in variable
costs. Fixed costs for the operation are estimated to run $4.5 million per year.
The estimated sales volum
e is 70,000, 80,000, 100,000, 85,000, and 75,000
per each year for the next five years, respectively. The unit price of the new
PDA will be $340. The necessary equipment can be purchased for $16.5
million and will be depreciated on a 5 year straight
–
line s
chedule.

Net working capital investment for the PDAs will be $6,000,000

the first year
of operations.

Of course NWC will be recovered at the projects end.

Conch
Republic has a 35 percent corporate tax rate and a 12 percent required return.

Shelly has as
ked Jay to prepare a report that answers the following questions:

1.

What is the IRR of the project?

2.

What is the NPV of the project, based on the required rate of return of 12%?