Investment Analysis and Lockheed Tri Star

Investment Analysis and Lockheed Tri Star Group effort Total points 100 (Course course of instruction 25%) This case comprises foursome serially numbered stand-alone problems and the fifth one appears with the title of Lockheed Tri-Star. You are required to offer your calculations of encourages as indicated below. In sum to the calculations, write a brief summary of your findings in about 100 words for each problem. 1) Rainbow Products20 points Machine Purchase Machine plus service fill Enhanced Machine Payback period 7 Years 7. 78 Years 7. 65 Years NPV ($945. 8) $2,500. 00 $15,000. 00 IRR 11. 49% 12. 86% 15. 43% Decision (Yes/No) NO YES YES We would advise Rainbow Products to not purchase the paint-mixing equipment unless they decided take on the additional $500 per year expenditure to service the machine, or decided to reinvest 20% of the yearly cost savings back into new machine parts. Either of the last two options would benefit the company, unlike the primary option, as t hey provide both a positive Net Present Value (NPV) and Internal Rate of Return (IRR) greater than the Cost of Capital.Although the last two options have longer Payback Periods than the first option, using Payback Period to make a determination in this example is not suitable because of the shortcomings of the method. 2) Concession Stand20 points Criteria Add a new window Update Equipment upstart Stand Rent Any other option? Wildcard Add a New Window AND Update Existing Equipment NPV ($) $25,461. 91 $2,514. 18 $34,825. 76 $28,469. 88 $27,976. 08 NPV egregious No WildcardNPV crying(a) Wildcard 34 45 11 22 3 IRR (%) 34. 2% 18. 01% 31. 21% 1207. 61% 28. 10% IRR Rank No WildcardIRR Rank Wildcard 22 45 33 11 4 MIRR (%) 26 . 77% 16. 90% 24. 82% 255. 21% 23. 01% MIRR Rank No WildcardMIRR Rank Wildcard 22 45 33 11 4 It would be in the best interest of the Concession Stand to either Build a New Stand, or Rent a Larger Stand. Under the NPV method, Building a New Stand would be the most beneficial option, with the Rent choice beingness the second best option.Under the IRR and MIRR methods, the Rent choice would be a clear favorite while the Building a New Stand choice would be the third most beneficial option. Their choice in which action to take would depend upon which methodology best aligned with their operational goals, although NPV is a more ordinarily used and trusted approach than IRR because of several issues that can derail IRR calculations. 3) MBATech, Inc. 20 points Alternative Cost to the city ($) Increase IRR to 25% $122,103Give 2-year payback $256,522 NPV of $75,000 (at 20% discount) $112,666 ARR of 40% $173,913 Although the cost to the city could vary depending upon the timing of the premium payments due to the time value of money, our calculated costs reflect immediate payment of the subsidy during the initial investment period. With that said, the city would be wise in pursuing the NPV of $75,000 method as the cost of this method would be the least expensive of the four alternatives.An upfront payment to MBA Tech, Inc. , from the city, for $112,666 would be sufficient in pushing the NPV of the project to the $75,000 limit. The city should avoid the 2-year payback method if at all possible as this would have the greatest cost by a substantial margin. 4) Valu-Added Industries, Inc. 10 points NPV of the project $100,000 Number of shares to be issued 1,000 Price per share $110. 00 By issuing 1,000 shares to the unrestricted at $10. 0 per share, Valu-Added Industries will be financing the entire project through investors. This action will also indicate to current stockholders that the future market place value of the shares of stock of the company should be higher in value. With no further information, it would appear that both Valu-Added Industries, and their stockholders, would benefit from the organization taking on this opportunity, and that the value of the company would only increase by doing so. ) Lockheed Tri St ar30 points At planned production levels of 210 units, what was the true value of the Tri star course of study? ($584,048,126) At planned production levels of ccc units, what was the true value of the Tri star program? ($274,381,683) At planned production levels of 323 units, what was the true value of the Tri star program? ($206,205,933) At what sales volume would the program reach true break even? About 388