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Application Software Exercise: Spreadsheet Exercise

Please convert this CAD.doc file into excel with all the formulas. I need this today within three hours (need to see the excel formula involved). By the way, Kevin forgot to answer this question: Is this investment worthwhile? Why or why not?

Business, Finance - Year 1

Application Software Exercise: Spreadsheet Exercise:

Just want double check my calculation - all work must be performed in Excel using Excel built-in formulas. Thanks. (extra credit)

See attached.

Problem: Your Company would like to invest in a new computer-aided-design (CAD) system that requires purchasing hardware, software, and networking technology, as well as expenditures for installation, training, and support. The tables showing each cost component for the new system as well as annual maintenance costs over a five-year period are listed below. You believe the new system will produce annual savings by reducing the amount of labor required to generate designs and design specifications, thus increasing cash flow. Using the data provided and instructions at the Web site for this chapter create a worksheet that calculates the costs and benefits of the investment over a five-year period and analyzes the investment using the six capital budgeting models presented in this Chapter 15. Is this investment worthwhile? Why or why not?

? Payback period - indicate yearly and cumulative figures for years 2005-2009
? Accounting Rate of Return on Investment (ROI). Assume depreciation to be the total initial cost of the investment in Year 0.
? Cost-Benefit Ratio
? Net Present Value, assuming an interest rate of 5%
? Profitability Index
? Internal Rate of Return

See attached.

Thanks, Gary