Develop an excel spreadsheet for a company

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This assignment is to develop an Excel Spreadsheet for a company. The spreadsheet should include instructions on how to enter in the inputs. (For example, should the initial investment be entered in as a negative or positive value).

You may work in groups of up to 3 students for this assignment. You may submit this assignment on Canvas or by sending it to me by email.

You have just been hired as a financial analyst for a small firm whose employees do not have much experience with Excel. As your first task, you have been asked to develop a simple Excel spreadsheet that your manager can input values for a project the firm is considering to determine whether the project is acceptable. The capital budgeting techniques that the firm uses: Net Present Value; Internal Rate of Return; Profitability Index.

The spreadsheet should contain cells where the manager can input cash flows associated with the project, and the project hurdle rate (or cost of capital). Assume that the longest project that will be considered is a ten-year project. The spreadsheet should contain cells that calculate the NPV, IRR and PI once the inputs have been entered.

Because this is for a manager that has not used Excel before, the spreadsheet should include instructions on how to enter in the inputs (for example, should the initial investment be entered in as a negative or positive value). It should also be formatted so that the manager is able to immediately see whether the project is acceptable or not, without the manager needing to know what the criteria are for accept/reject for a particular technique. In other words, based on the value (NPV, IRR, etc.) generated by the project, there should be a cell that indicates whether the project should be accepted or not. Finally, the manager's background is in design, so he likes to see documents that are visually pleasing.

This assignment is worth 5 points. You have the opportunity to earn one extra credit point if you also set up a calculation and provide the accept/reject decision using the payback period. To earn the extra credit point, you will have to use nested =IF statements to figure out the payback period in one cell. For your firm, the maximum acceptable payback period is 4 years.

The following Excel functions may come in useful: =NPV, =IRR, =IF

Reference no: EM131311847

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