Instructions to complete your assignment

Download a copy of your financial modelling assignment from Moodle.

Each student on this course has been individually allocated their own spreadsh
via Moodle. Each spreadsheet is different and will therefore have different ans

Please note that if you submit a different spreadsheet than the one that has b
answers will be wrong! This assignment is electronically marked so your answ
incorrect if they do not match the spreadsheet that was assigned to you.

Complete the Financial Modelling Tutorials that relate to each task.

Each week there is a Financial Modelling Tutorial on Moodle that relates to on
example, to in Week 1 you will find Financial Modelling Tutorial 1 which relate

You should complete the Financial Modelling Tutorials for each week before c
that tutorial. This will ensure that you are familiar with any specific technique
task.

Complete the calculations required in the blue boxes that are available on ea
Most of the cells on each sheet have been locked to ensure that you can not ac
require to complete the tasks. The only cells that you can work in will be the bl

Some tasks will contain additional blue boxes for you to identify some of the
calculation. For example, if you are calculating a debt-to-equity ratio there w
value of the debt, another blue box for the equity and a final blue box for the

Use formula throughout your spreadsheet to create a robust financial model

50% of the marks available in this assignment are awarded for creating robust
model the answers should automatically update if any of the data provided cha

For example, if you need to use an interest rate as part of one of your calcula
that the interest rate is 5% then you should create a link to cell E15 in your sp
typing 5% into your cell/formula.
 Back Next

om Moodle.
heir own spreadsheet, which can only be accessed by them
have different answers.

the one that has been allocated on your Moodle page your
arked so your answers will automatically be marked
signed to you.

ach task.
that relates to one of the tasks in the assignment. For
rial 1 which relates to Task 1 of the assignment.

each week before completing the task that corresponds to

y specific techniques or formula required to complete each

are available on each task.

that you can not accidentally delete any of the data that you
ork in will be the blue cells.

entify some of the data that you have used in your

quity ratio there will be one blue box for you to enter the
al blue box for the ratio itself.

st financial model
or creating robust financial models. In a robust financial
e data provided changes.

one of your calculations and you have been told in cell E15
cell E15 in your spreadsheet/formula rather than manually
Task 1
Part (a)
You have been provided with information from Company A's financial statements for the year en
Please use this information calculate the following investor ratios as at 30 September 2022 (in th
Earnings per share
Debt-to-equity ratio
Dividend per share
Dividend yield
Part (b)
The company's directors would like to expand the business to increase the company's operating
They are considering two different finance options to fund this expansion (Option 1 and Option 2
For each finance option, please calculate the impact that the expansion will have on the followin

Forecast profit after tax for the year ended 30 September 2023
Earnings per share for the year ended 30 September 2023

Please ensure that you use formula wherever appropriate, so that the answers automatically u

Company A
Income statement for the year to 30 September 2022

£
Revenue 21,500,000
Cost of sales -4,800,000
Gross profit 16,700,000
Administrative expenses -6,250,000
Operating profit 10,450,000
Finance costs -328,600
Profit before tax 10,121,400
Corporation tax @ 25% -2,530,350
Profit after tax 7,591,050
Company A
Market information

Ordinary share price (pence) 525.0

Task 1(a)
Please calculate the following investor ratios

Earnings per share (pence)

Debt-to-equity ratio (%)

Dividend per share (pence)

Dividend yield (%)

Task 1(b)
For each of the finance options, please calculate the
forecast profit after tax and earnings per share

Option 1 Option 2
£ £
Existing operating profit
Additional operating profit
Revised operating profit
Existing finance costs
Additional finance costs
Profit before tax
Corporation tax @ 25%
Profit after tax
Number of shares
Earnings per share (pence)
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Marks available
ments for the year ended 30 September 2022. Methodology
eptember 2022 (in the blue boxes provided below): ###

ompany's operating profit next year.

ption 1 and Option 2).
have on the following (in the blue boxes provided below):

wers automatically update if any of the information changes.

Company A
Statement of financial position at 30 September 2022

£
Non-current assets 15,000,000
Current assets 4,700,000
Total assets 19,700,000

Ordinary share capital Note 1 2,100,000

Retained earnings Note 2 7,400,000
Total equity 9,500,000

Non-current liabilities Note 3 6,200,000

Current liabilities 4,000,000
Total equity & liabilities 19,700,000

Company A
Notes to the financial statements

Note 1: Ordinary share capital

Nominal value per share £0.50
Number of ordinary shares in issue 4,200,000

Note 2: Retained earnings Marks available

Retained earnings at the start of the year 2,288,950
Methodology
Profit after tax 7,591,050 Earnings per share (penc
Dividends paid -2,480,000
Retained earnings at the end of the year 7,400,000 Debt-to-equity ratio (%)

Note 3: Non-current liabilities Dividend per share (penc

Bank loan 6,200,000
Interest rate 5.3% Dividend yield (%)

Company A
Details of expansion plans

Main details £
Forecast increase in operating profit 2,200,000
Marks available
Total finance required 8,200,000 Option 1
Existing operating profit
Finance option 1 Additional operating profi
All of the finance would be raised using a bank loan Revised operating profit
Interest rate per annum 5.2% Existing finance costs
Additional finance costs
Finance option 2 Profit before tax
The company would issue additional ordinary shares Corporation tax @ 25%
Issue price per share (pence) 500.0 Profit after tax
Number of additional shares issued 1,640,000 Number of shares
Earnings per share
Task 2
Part (a)
Company B is planning to offer existing shareholders the opportunity to buy additional shares via
Using the information provided, please calculate the following:
The theoretical ex-rights price
The value of a right

Part (b)
Additionally, the directors would like to know what impact the rights issue would have on the co
Using the information provided, and your previous calculations, please calculate the following:
The average annual dividend growth rate
The correlation co-efficient of the dividend trend
Forecast the dividend per share that the company would be expected to pay next year
The total dividends that the company will pay without a rights issue and with a rights issue.
Please ensure that you use formula wherever appropriate, so that the answers automatically u

Company B
Rights issue proposal

Type of rights issue 1-for-3

Issue price per share £4.60

Company B
Dividends per share

2018 2019
Dividend per share (pence) 27.5 28.6

Task 2(a)
Please calculate the theoretical ex-rights price and the value of a right.

Share price Number

£ of shares
Existing shares
Rights issue
Total

Theoretical ex-rights price

Value of a right

Task 2(b)
Please calculate the following
Average annual dividend growth rate

Correlation co-efficient of the dividend trend

Forecast dividend per share for next year (pence)

£
Total dividends next year - without a rights issue
Total dividends next year - with a rights issue
 Back Next
Marks available
buy additional shares via a rights issue. Methodology
###

e would have on the company's dividend payments next year.

alculate the following:

pay next year

with a rights issue.
nswers automatically update if any of the information changes.

Rights issue type

Company B 1-for-2
Ordinary shares 1-for-3
1-for-4
Number of ordinary shares in issue 6,300,000 1-for-5
Nominal value per share £1.00 1-for-6
Market value per share £4.84 2-for-3
2-for-5
Correct fraction

Marks available
2020 2021 2022 Share price
29.2 32.1 34.0 Existing shares
Rights issue

Number of shares
 Existing shares
Rights issue
Total value Total
£ Total value
Existing shares
Rights issue
Total

Theoretical ex-rights pric

Value of a right

Average annual dividend

Correlation co-efficient o

Forecast dividend per sha

Total dividends next year

Total dividends next year
Task 3
Company C is planning to issue bonds and the company's directors are considering two differe

Part (a)
Using the information provided for Option 1, please calculate the following:
Gross yield of Option 1
The total interest payable each year if they use Option 1

Part (b)
Using the information provided for Option 2, please calculate the following:
Gross yield of Option 2
The total interest payable each year if they use Option 2

Please ensure that you use formula wherever appropriate, so that the answers automaticall

Part (a)
Please complete the following for Option 1
Number of years

Interest per bond

Market value per bond
Redemption value per bond

Gross yield

Total interest payable per year

Company C
Bond option 2

Type of bonds Convertible

Number of bonds being issued 10,000
Issue price per bond £100.00
Coupon rate per bond 3%
Years until redemption/conversion 6
Redemption in cash (at a premium) 5%
Shares offered on conversion 20
Current share price (pence) 314
Forecast annual growth in share price 8%
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nsidering two different options. Marks available

Methodology
###
g:
Redeemable bonds
(at a discount)
(at a premium)
Convertible bonds
g: (at a discount)
(at a premium)

nswers automatically update if any of the information changes.

Company C Marks available

Bond option 1 Bond option 1
Number of years
Type of bonds Redeemable
Number of bonds being issued 10,000 Interest per bond
Market value per bon
Coupon rate per bond 6% Redemption value per
Issue price per bond £100.00
Gross yield
Redemption value (at a discount) 2%
Years until redemption 5 Total interest payable

Part (b) Marks available

Please complete the following for Option 2 Bond option 2
Number of years Number of years

Interest per bond Interest per bond

Market value per bond Market value per bon
Cash redemption Cash redemption
Conversion value Conversion value
Redemption value Redemption value

Gross yield Gross yield

Total interest payable per year Total interest payable

Task 4
Company D is a listed company based in the UK. The company pays corporation tax at a rate of 25
You have been asked to help to the directors of Company D to calculate the company's cost of cap

Part (a)
You have been given information about the three different sources of finance that the company h
For each of the three sources of finance, please calculate the following:
The cost of each source of finance (e.g. the cost of equity [ke] for the ordinary shares)
The total market value of the shares / bonds
Part (b)
Using your calculations above, please calculate the company's Weighted Cost of Capital (WACC).
Please ensure that you use formula wherever appropriate, so that the answers automatically up

Part (a)
Please complete the following for the ordinary shares
D0 (pence)
P0 (pence)

g
Ke

MVe (£)

Please complete the following for the preference shares

D0 (pence)
P0 (pence)

Kp
MVp (£)

Please complete the following for the irredeemable bonds

Interest per bond (£)

Market value per bond (£)

Tax rate
Kd

MVd (£)

Part (b)
Please calculate the company's Weighted Average Cost of Capital.

Cost
%
Ordinary shares
Preference shares
Irredeemable bonds
Total

Weighted average cost of capital

 Back Next
ation tax at a rate of 25%. Marks available
e company's cost of capital. Methodology
###
nce that the company has used.

nary shares)

ost of Capital (WACC).

nswers automatically update if any of the information changes.

Company D Marks available

Ordinary shares Ordinary shares
D0 (pence)
Number of ordinary shares issued 1,400,000 P0 (pence)
Share price (pence) 395.0
g
2022 dividend per share (pence) 34.0 Ke
2017 dividend per share (pence) 28.0
MVe (£)

Company D
Preference shares Preference shares
D0 (pence)
Number of preference shares issued 600,000 P0 (pence)
Nominal value per share (pence) 25.0
Share price (pence) 42.0 Kp
Preference dividend rate 11.0%
MVp (£)

Company D
Irredeemable bonds Irredeemable bonds
Interest per bond (£)
Number of bonds issued 15,000 Market value per bond (£

Market value per bond £98.00 Tax rate

Kd
Coupon rate 6.0%
MVd (£)

Market value Cost

£ £ Cost (%)
Ordinary shares
Preference shares
Irredeemable bonds
Market values
Ordinary shares
Preference shares
Task 5
The directors of Company E wish to calculate the company's cost of capital using the Capital Ass
Part (a)
You have been provided with monthly values for Company E's share price and the FTSE 100 inde
Using this information, please calculate the following:

The monthly growth in the company's share price in the 12 months to 30 September 2022.
The monthly growth in the FTSE index in the 12 months to 30 September 2022.
Part (b)
You have also been provided with other market data on Company E and general market informa
Please calculate the company's Weighted Average Cost of Capital (WACC) using the CAPM formu

Please ensure that you use formula wherever appropriate, so that the answers automatically

Part (a) Please calculate the monthly growth in Company E's share price and the FTSE index

Company E Share price FTSE 100

Share price growth index
(pence) (%) (points)
### 424.0 n/a 7,180.0
Sunday, October 31, 2021 432.0 7,265.0
### 414.0 7,023.0
Friday, December 31, 2021 444.0 7,380.0
Monday, January 31, 2022 452.0 7,475.0
Monday, February 28, 2022 441.0 7,452.0
Thursday, March 31, 2022 456.0 7,515.0
Saturday, April 30, 2022 464.0 7,573.0
Tuesday, May 31, 2022 466.0 7,666.0
Thursday, June 30, 2022 432.0 7,115.0
Sunday, July 31, 2022 457.0 7,432.0
### 462.0 7,485.0
Friday, September 30, 2022 465.0 7,595.0

Part (b) Please complete the following calculations

Market data
General market data

Interest rate paid on treasury bills 5.9%

General inflation 4.2%

Company E
Market data

Ordinary shares
Number of ordinary shares issued 900,000
Share price (pence) 465.0

Irredeemable bonds
Number of bonds issued 12,000
Market value per bond £98.00
Coupon rate 4.0%

Corporation tax rate 25.0%

Weighted average cost of capital

Cost
%
Ordinary shares
Irredeemable bonds
Total

Weighted average cost of capital

 Back Next
Marks available
al using the Capital Asset Pricing Model (CAPM).
Methodology
###
e and the FTSE 100 index up to 30 September 2022.

September 2022.
2022. Marks available
Share price growth
general market information. ###
) using the CAPM formula to calculate the cost of equity. ###
answers automatically update if any of the information changes. ###
###
###
###
###
###
e and the FTSE index ###
###
Market ###
growth ###
(%)
n/a Index growth
###
###
###
###
###
###
###
###
###
###
###
 ###

Marks available
Ordinary shares Ordinary shares
Risk-free rate (Rf) Risk-free rate (Rf)

Average market return (Rm) Average market return (R

Company E's beta factor (β) Company E's beta factor

Company E's cost of equity (Ke) Company E's cost of equi

Total market value (MVe) (£) Total market value (MVe

Irredeemable bonds Irredeemable bonds

Interest per bond (£) Interest per bond (£)

Market value per bond (£) Market value per bond (£

Corporation tax rate Corporation tax rate

Cost of debt (Kd) Cost of debt (Kd)

Total market value (MVd) Total market value (MVd

Market value Cost

£ £ Cost (%)
Ordinary shares
Irredeemable bonds

Market value (£)

Ordinary shares
Task 6
The directors of Company F are trying to identify the best capital structure for the company f
Their main aim is to choose the capital structure which has the optimum Weighted Average C
Part (a)
For each of the two capital structure options outline below, please calculate the following:
Equity beta
Cost of equity
Cost of debt
Weighted average cost of capital

Part (b)
Once you have completed the two WACC calculations, please complete the summary table to
capital structure provides the optimum WACC and which option the directors should choose.

Please ensure that you use formula wherever appropriate, so that the answers automatica

Company F
Asset beta

Asset beta 0.72

Part (a)
Please complete the calculations outline below for each option

Company F
Capital structure option 1

Ordinary shares
Share price £2.24
Number of shares in issue 1,200,000

Debt finance
Bank loan £550,000
Interest rate 4.8%

Weighted average cost of capital

Cost
%
Ordinary shares
Bank loan
Total

Weighted average cost of capital

Company F
Capital structure option 2

Ordinary shares
Share price £2.20
Number of shares in issue 800,000

Debt finance
Bank loan £750,000
Interest rate 5.1%

Weighted average cost of capital

Cost
%
Ordinary shares
Bank loan
Total

Weighted average cost of capital

Part (b)
Summary of results WACC
Option A
Option B

Optimum WACC

Optimum capital structure

 Back Next
Marks available
re for the company from two options.
Weighted Average Cost of Capital (WACC). Methodology
###

ate the following:

he summary table to show the WACC for each option and identify which
ctors should choose.

answers automatically update if any of the information changes.

Company F
Market information

Risk-free rate 3.0%

Average market return 9.0%
Corporation tax rate 25.0%

Marks available
Option 1 Option 1
Asset beta Asset beta
Market value of debt (£) Market value of debt
Market value of equity (£) Market value of equit
Tax rate Tax rate
Equity beta Equity beta

Risk-free rate Risk-free rate

Average market return Average market return
Cost of equity Cost of equity

Cost of debt Cost of debt

Ordinary shares
Bank loan
Market value Cost Ordinary shares
£ £ Bank loan
Total
Ordinary shares
Bank loan
Total
Weighted average cos

Option 2 Option 2
Asset beta Asset beta
Market value of debt (£) Market value of debt
Market value of equity (£) Market value of equit
Tax rate Tax rate
Equity beta Equity beta

Risk-free rate Risk-free rate

Average market return Average market return
Cost of equity Cost of equity

Cost of debt Cost of debt

Ordinary shares
Bank loan
Market value Cost Ordinary shares
£ £ Bank loan
Total
Ordinary shares
Bank loan
Total
Weighted average cos
Task 7
Company G has developed a new product, which is expected to sell for four years.
The directors need to decide whether to invest in the production equipment that is required to m

Part (a)
Using the information provided, please calculate the net present value of the investment
Part (b)
Please indicate to the directors whether they should 'Accept' or 'Reject' the investment.

Please ensure that you use formula wherever appropriate, so that the answers automatically up

Company G
Investment opportunity: forecast revenue and costs

Year 1 Year 2
Sales volume (units) 10,250 12,750
Selling price per unit £112.00 £115.00

Variable cost per unit £40.00 £45.00

Fixed costs per year £215,000 £235,000

Company G
Investment opportunity: production equipment

Cost of equipment £1,900,000

Useful life (years) 4
Disposal proceeds £240,000

Part (a)
Please complete the net present value calculation below
Please note: all cash payments should be clearly shown in the calculation as negative values

Year 0 Year 1
£ £
Revenue
Variable costs
Fixed costs
Net trading cash flows
Corporation tax
Equipment
Disposal proceeds
Capital allowances (Working 1)
Net cash flows

Cost of capital

Net present value

Working 1 - Capital allowances

Value Tax saving
£ £
Year 0 - Buy the asset
Year 1 - 18% allowance

Year 2 - 18% allowance

Year 3 - 18% allowance

Year 4 - disposal proceeds

Year 4 - balancing allowance

 Back Next
r years. Marks available
nt that is required to make this product. Methodology
###
he investment

e investment.

swers automatically update if any of the information changes

Year 3 Year 4
15,500 8,500
£118.00 £120.00

£50.00 £60.00

£255,000 £275,000

Company G
Investment opportunity: relevant rates

Corporation tax rate 25.0%

Capital allowances (reducing balance) 18.0%
Cost of capital 11.0%
n as negative values

Year 2 Year 3 Year 4 YearMarks

5 available
£ £ £ Methodology
£
###
###
###
###
###
###
###
###
###

###

###
Part (b) Value
Please indicate whether the directors should ###
'accept' or 'reject' the investment decision
###
###
###
Accept or reject ###
###
###
###
###
###
Task 8
Company H has developed a new product and the directors are trying to forecast the revenue an
Part (a)
The directors have hired a market research company to forecast the potential sales volumes for e
The market research firm has advise Company H on an appropriate selling price for the product.
They have also indicated how much the selling price could be increased by each year.
However, they have indicated that sales volume for each year will depend on economic condition

Using this information provided, please calculate the following:

The selling price per unit for each of the four years
The expected value of the sales volumes for each of the four years
The total revenue for each of the four years

Part (b)
Company H's purchasing manager has provided information relating to the cost of materials in re
Using this information and your calculations in part (a), please calculate the following:

The average annual growth in the cost of materials per unit in recent years
The correlation co-efficient of the cost of materials per unit over over during this period
The forecast cost of materials per unit for each of the next four years
The total cost of materials for each of the next four years.

Please ensure that you use formula wherever appropriate, so that the answers automatically u

Company H
Market research

Selling price Year 1

Recommended selling price per unit £156.00
Recommended annual increase in price 3.0%

Forecast sales volumes

 Year 1 Year 2
Economic conditions Probability (units) (units)
Good 25% 24,100 27,500
Average 60% 16,750 26,400
Poor 15% 13,000 20,100

Part (a)
Please complete the following calculations

Year 1 Units % Expected value

Good
Average
Poor

Year 2 Units % Expected value

Good
Average
Poor

Year 3 Units % Expected value

Good
Average
Poor

Year 4 Units % Expected value

Good
Average
Poor

Company H
Historic cost of materials

2017 2018 2019

Cost per unit £47.50 £51.50 £53.00

Part (b)
Please complete the following calculations

Average annual growth rate in cost per unit

Correlation co-efficient of the cost per unit

Forecast cost of materials for next four years

2023 2024 2025
Cost per unit
Units
Total cost
 Back Next
orecast the revenue and costs for the next four years Marks available
Methodology
###
ntial sales volumes for each year.
price for the product.
y each year.
on economic conditions.

e cost of materials in recent years.

he following:

s
ing this period

nswers automatically update if any of the information changes

 Year 3 Year 4
(units) (units)
32,500 19,100
27,150 16,250
24,400 11,300

Selling price Total

per unit revenue
Marks available
Year 1
Volume
Price
Total

Year 2
Volume
Price
Total

Year 3
Volume
Price
Total

Year 4
Volume
Price
Total
 2020 2021 2022
£54.50 £56.50 £57.50

Average annual growth r

Correlation co-efficient o

2026 ###
Cost per unit
Units
Total cost
Task 9
The finance director of Company I has produced a Net Present Value calculation for a proposed in
However, the finance director is concerned that some of the estimates in the calculation may be in

Part (a)
Please calculate the sensitivity of the Net Present Value calculation to changes in the following:

Selling price per unit

Staff costs
Other overheads
Part (b)
Please complete the table which shows the sensitivity of each of the variables above and rank the
Please ensure that you use formula wherever appropriate, so that the answers automatically up

Company I
Investment opportunity: Net Present Value calculation

Year 0 Year 1
£ £
Revenue 2,600,000
Cost of materials -845,000
Staff costs -650,000
Other overheads -570,000
Net trading cash flows 535,000
Corporation tax
Equipment -1,000,000
Disposal proceeds
Capital allowances
Net cash flows -1,000,000 535,000

Cost of capital 12.0%

Net present value 211,466

Corporation tax rate 25.0%

Part (a)
Please calculate the sensitivity of the NPV calculation to changes in the following variables:

Selling price Year 0 Year 1

£ £
Cash flows affected (before tax)
Corporation tax
Net cash flows

Cost of capital
Present value of cash flows affected
Original NPV
Sensitivity

Staff costs Year 0 Year 1

£ £
Cash flows affected (before tax)
Corporation tax
Net cash flows

Cost of capital
Present value of cash flows affected
Original NPV
Sensitivity

Other overheads Year 0 Year 1

£ £
Cash flows affected (before tax)
Corporation tax
Net cash flows
Cost of capital
Present value of cash flows affected
Original NPV
Sensitivity

Part (b)
Please complete the table below and rank the variable (most sensitive = 1, least sensitive =3)

Sensitivity Ranking
Selling price
Staff costs
Other overheads
 Back Next
Marks available
ation for a proposed investment opportunity.
he calculation may be inaccurate. Methodology
###
nges in the following:

bles above and rank them (most sensitive = 1, least sensitive =3).
swers automatically update if any of the information changes

Year 2 Year 3 Year 4

£ £ £
2,700,000 2,850,000
-950,000 -1,025,000
-675,000 -700,000
-580,000 -590,000
495,000 535,000
-133,750 -123,750 -133,750

125,000
45,000 36,900 136,850
406,250 573,150 3,100
e following variables:

Year 2 Year 3 Year 4 Marks available

£ £ £ Methodology
###
###
###

###
###
###
###

Year 2 Year 3 Year 4 Marks available

£ £ £ Methodology
###
###
###

###
###
###
###

Year 2 Year 3 Year 4 Marks available

£ £ £ Methodology
###
###
###
 ###
###
###
###

= 1, least sensitive =3)

Marks available
Methodology
###
###
###
Task 10
The directors of Company J would like to assess a new investment proposal using a Net Present V
The finance director has set up some initial information into a template and would like you to co

Part (a)
Using the information provided, please complete the following remaining sections of the Net Pre

Revenue & costs (with random values generated within the limits you have been given)
Net trading cash flows
Corporation tax charges
Part (b)
Using appropriate formulas, please set up the spreadsheet to identify the following values from
Average NPV
Maximum NPV
Minimum NPV
Probability of failure

Please ensure that you use formula wherever appropriate, so that the answers automatically u
Please note that any random values will automatically refresh on a regular basis. So the most i
been set up correctly so that your answers will also update automatically.

Company J
Revenue and cost forecasts

Year 1 Year 2
Revenue £ £
Minimum revenue 900,000 1,125,000
Maximum revenue 2,125,000 2,650,000

Costs
Minimum costs 400,000 450,000
Maximum costs 600,000 700,000
Corporation tax rate 25%

Part (a)
Please complete the remaining sections of the Net Present Value calculation

Year 0 Year 1 Year 2

£ £ £
Revenue
Costs
Net trading cash flows
Corporation tax
Equipment -3,000,000
Disposal proceeds
Capital allowances 135,000
Net cash flows -3,000,000 0 135,000

Cost of capital 16%

NPV simulation table (Rows 57-156) Part (b)

NPV 1 -2,365,102 Please complete the following
NPV 2
NPV 3 Average NPV
NPV 4 Maximum NPV
NPV 5 Minimum NPV
NPV 6 Probability of failure
NPV 7
NPV 8
NPV 9
NPV 10
NPV 11
NPV 12
NPV 13
NPV 14
NPV 15
NPV 16
NPV 17
NPV 18
NPV 19
NPV 20
NPV 21
NPV 22
NPV 23
NPV 24
NPV 25
NPV 26
NPV 27
NPV 28
NPV 29
NPV 30
NPV 31
NPV 32
NPV 33
NPV 34
NPV 35
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 Back
Marks available
al using a Net Present Value simulation.
nd would like you to complete the calculation. Methodology
###
g sections of the Net Present Value calculation:

ve been given)

e following values from the NPV simulation table:

nswers automatically update if any of the information changes

ular basis. So the most important thing will be to ensure your formula has
ly.

Year 3 Year 4
£ £
1,600,000 1,100,000
2,900,000 2,200,000

600,000 550,000
900,000 350,000
 Year 3 Year 4 Year 5 Marks available
£ £ £ Methodology
###
###
###
###

500,000
110,700 90,774 288,526
110,700 590,774 288,526

omplete the following calculations from the NPV simulation table Marks available
Methodology
###
###
###
lity of failure ###
Help
Below are some of the Frequently Asked Questions regarding the Financial Modelling Assignme

I don't know how to complete a task?

To complete each task you will need to have completed the Financial Modelling Tutorial (on Mo
For example, to complete Task 1 you will first need to complete Financial Modellaing Tutorial 1.
You will also find that the lectures, tutorials and Financial Modelling handbook from that week
There may also be times that you need to apply knowledge from previous weeks as well.
So it is vital that you have also covered any previous Financial Modelling Tutorials before you tr

I can't type in one of the cells (or I can't show my workings)

Most of the cells on each sheet have been locked. This is to stop you from accidentally deleting
The only cells that you can type in are the cells which have been shaded blue.
You should not need to use any other cells on each sheet, as most values can be calculated usin
The only workings that you should show are the ones that you have been asked to complete as
You should not need to show any other workings.

I have entered my formula in a cell and now that cell just says ############
This means that your answer won't show up in the cell because it has lots of decimal places an
The cells have all been set up with a specified amount of decimal places, so that this doesn't ha
But sometimes MS Excel changes the number of decimal places automatically.
You can usually fix this by right clicking on the cell and choosing the option "format cells".
Then you can change the format to number or percentage (whichever is appropraite) and then
However, if you can not fix this error please don't worry. So long as your formula is correct, you
We do not need to see your answer in the cell to check that it is correct. So this error message

I am getting another type of error message in the cell (e.g. NUM!, VALUE! etc)
This usually means that your formula is incorrect or that you have made some sort of mistake.
Please check your formula again and refer to the Financial Modelling handbook (on Moodle) fo
To complete this task you will need to ensure that you are familiar w
techniques that were covered in the following lectures and tutorials
Financial modelling tutorial 10
In some tasks, you may also need to apply knowledge from previous
Please note that you can only enter information and formulas into th
All other cells on the spreadsheet are locked so that you do not accid
techniques that were covered in the following lectures and tutorials
Financial modelling tutorial 10
In some tasks, you may also need to apply knowledge from previous
Please note that you can only enter information and formulas into th
All other cells on the spreadsheet are locked so that you do not accid
If you get an error message which looks like ######### please do no
You may be able to fix this problem by right-clicking on the cell and s
change the format of the cells and the number of decimal places.
However, even if you can not fix this problem do not worry!
If your formula is correct, your answer will still be marked correctly.

For further questions please email l.rowlandson@mmu.ac.uk

cial Modelling Assignment…

odelling Tutorial (on Moodle) from that week.

l Modellaing Tutorial 1.
dbook from that week will help you too.
us weeks as well.
Tutorials before you try to complete each task.

om accidentally deleting any data.

d blue.
es can be calculated using formula.
en asked to complete as part of the task.

######
ots of decimal places and can not fit the width of the cell.
s, so that this doesn't happen.
atically.
tion "format cells".
s appropraite) and then change the number of decimal places.
r formula is correct, your answer will be marked correct.
. So this error message really doesn't matter.

UE! etc)
e some sort of mistake.
andbook (on Moodle) for further guidance.
 at you are familiar with the topics and
ectures and tutorials:

wledge from previous weeks tasks.

and formulas into the light blue cells.
that you do not accidentally delete data.
ectures and tutorials:

wledge from previous weeks tasks.

and formulas into the light blue cells.
that you do not accidentally delete data.
###### please do not worry.
king on the cell and selecting "format cells" to
of decimal places.
o not worry!
be marked correctly.

@mmu.ac.uk