EXERCISE 1.You are working for the company TBS.

TBS would like to invest in a project; however they have

a lot of doubts. They want to reach more details about the future and development of project.
The company has some data and you have to collect them and give an answer with the
possible choices for TBS.
You have information related to:
-

amount of expenses in every year: 20.000 $

amount of incoming in every year: 40.000 $ from the third year to the final life of the
project
period of life of the project: 15 years
necessary expenses to develop the project (in first and second year only): 40.000 $
interest on investment: 7,5%

Will the company earn money at the end of the life of the project?
Present value:
When is the company going to get money at first time?
Payback point:
SOLVE IN EXCEL:
Draw the cash-flow graph
EXERCISE 2.TBS think that information is not enough to take a good decision, so they want to introduce
more parameters to take a good decision.
They want to know the risk of the investment, so what is the maxim value of the interest of
investment to be zero the net actual value at the end of the period?
SOLVE IN EXCEL: Objective function
Rate of return on capital:
EXERCISE 3.Despite you gave a good answer they want to learn more about the project and they want to
know the evolution of the net present value analysis. They ask you for a comparison of this
value from 5% of interest of investment to 12% with an increase of 0,5%. Furthermore they
want a graph.
SOLVE IN EXCEL. Method Table analyses
EXERCISE 4.-

Despite the results you have given to the company they still have more doubts. They want to
study more variables. They guess that the value of the production will increase a 0,13% per
year. With this new theater of operations they want to know the new values of all the
parameters of the project if the increase of production is changing from 0 to 0,5% with an
increase of 0,05%.
SOLVE IN EXCEL: Method. Double entry table analyses.