Please answer the following Managerial Accounting in Excel- template provided. Integration exercise week 5 1 The net present value is computed as follows: Discount rate 16.00% Now 1 2 3 Working capital investment $(xxxxx) Sales $xxxxx $xxxxxx $xxxxxx Variable expenses $(xxxx) $(xxxxx) $(xxxxx) Working capital released $xxxxxx Net cash flows (a) $(xxxxxx) $xxxxx Discount factors (16%) (b) 1 0.862 0.743 0.641 Present value (a) x (b) (xxxxxx) $xxxxx $xxxxxx $xxxxxx Net present value SUM(E18:H18) $xxxxx 2 Calculate Margin, Turnover, and return on investment *hint: The margin, Turnover, and ROI is the same for years 1 through 3 if you do your math right. 1 2 3 Sales (a)………………………………………….. $xxxxxx $xxxxxx $xxxxxx Variable expenses……………………………. $xxxxxx $xxxxxx $xxxxxx Net operating income (b)…………………… $xxxxxx $xxxxxx $xxxxxx Average operating assets ( c )…………….. $xxxxxx $xxxxxx $xxxxxx Margin (b) ÷ (a)………………………………… xxxxx% xxxxx% xxxxxx% Turnover (a) ÷ (c)……………………………… xxxxx xxxxx xxxxxx Return on investment (b) ÷(c)…………….. xxxxx% xxxxx% xxxxx% 3 The residual incomes for each year are computed as follows: 1 2 3 Net operating income (a)……………………. $xxxxxx $xxxxxx $xxxxxx Average operating assets (b)……………….. $xxxxxx $xxxxxx $xxxxxx Minimum required rate of return ( C )… xxxxx% xxxxx% xxxxx% Residual income (a)-[(b)x ( C )]……….. $xxxxxx $xxxxxx $xxxxxx 4 Answer all parts as asked in this question in the textbook. 5 The present value of the residual incomes will be computed as follows: Total 1 2 3 Residual income (a)…………………………… $xxxxxx $xxxxxx $xxxxxx Discount factors (b)…………………………… 0.862 0.743 0.641 Present value (a) x (b)……………………….. $xxxxxx $xxxxxx $xxxxxx $xxxxxx Does the present value of the residual incomes equals the net present value from requirement 1 (question 1 above?) why or why not?
