“1.  Conch Republic Electronics
a. What is the IRR of the project?
b. What is the NPV of the
project, based on the required rate of return of 12%?

I
think you will find an Excell spreadsheet to be the most effective way of
completing this assignment. The conch
republic project is about math, therefore, I expect a spreadsheet with the
cells readable so that I can track your work through the assignment. It requires that you figure out the NPV and
IRR of the potential investment. No
report is necessary, but please submit an excel spreadsheet with the cells and
formulas in place so that I can see that you understood what was going on.
Conch Republic
Electronics
Conch Republic
Electronics is a mid-sized electronics manufacturer located in Key West,
Florida. The company president is Shelley Couts, who inherited the company.
When it was founded over 70 years ago, the company originally repaired radios
and other household appliances. Over the years, the company expanded into
manufacturing and is now a reputable manufacturer of various electronic items.
Jay McCanless, a recent MBA graduate, has been hired by the company’s finance
department.
One of the major
revenue-producing items manufactured by Conch Republic is a personal digital
assistant (PDA). Conch Republic currently has one PDA model on the market, and
sales have been excellent. The PDA is a unique item in that it comes in a
variety of tropical colors and is preprogrammed to play Jimmy Buffett music.
However, as with any electronic item, technology changes rapidly, and the
current PDA has limited features in comparison with newer models. Conch
Republic developed a prototype for a new PDA that has all the features of the
existing PDA but adds new features such as cell phone capability. The company
has performed a marketing study to determine the expected sales figures for the
new PDA.
Conch Republic
can manufacture the new PDA for $200 each in variable costs. Fixed costs for
the operation are estimated to run $4.5 million per year. The estimated sales
volume is 70,000, 80,000, 100,000, 85,000, and 75,000 per each year for the
next five years, respectively. The unit price of the new PDA will be $340. The
necessary equipment can be purchased for $16.5 million and will be depreciated
on a 5 year straight-line schedule.
Net working
capital investment for the PDAs will be $6,000,000 the first year of
operations. Of course NWC will be
recovered at the projects end. Conch
Republic has a 35 percent corporate tax rate and a 12 percent required return.

1.
Conch Republic Electronicsa. What is the IRR of the project?b. What is the NPV of the
project, based on the required rate of return of 12%?I
think you will find an Excell spreadsheet to be the most effective way of
completing this assignment. The conch
republic project is about math, therefore, I expect a spreadsheet with the
cells readable so that I can track your work through the assignment. It requires that you figure out the NPV and
IRR of the potential investment. No
report is necessary, but please submit an excel spreadsheet with the cells and
formulas in place so that I can see that you understood what was going on.Conch Republic
ElectronicsConch Republic
Electronics is a mid-sized electronics manufacturer located in Key West,
Florida. The company president is Shelley Couts, who inherited the company.
When it was founded over 70 years ago, the company originally repaired radios
and other household appliances. Over the years, the company expanded into
manufacturing and is now a reputable manufacturer of various electronic items.
Jay McCanless, a recent MBA graduate, has been hired by the company’s finance
department.One of the major
revenue-producing items manufactured by Conch Republic is a personal digital
assistant (PDA). Conch Republic currently has one PDA model on the market, and
sales have been excellent. The PDA is a unique item in that it comes in a
variety of tropical colors and is preprogrammed to play Jimmy Buffett music.
However, as with any electronic item, technology changes rapidly, and the
current PDA has limited features in comparison with newer models. Conch
Republic developed a prototype for a new PDA that has all the features of the
existing PDA but adds new features such as cell phone capability. The company
has performed a marketing study to determine the expected sales figures for the
new PDA.Conch Republic
can manufacture the new PDA for $200 each in variable costs. Fixed costs for
the operation are estimated to run $4.5 million per year. The estimated sales
volume is 70,000, 80,000, 100,000, 85,000, and 75,000 per each year for the
next five years, respectively. The unit price of the new PDA will be $340. The
necessary equipment can be purchased for $16.5 million and will be depreciated
on a 5 year straight-line schedule.Net working
capital investment for the PDAs will be $6,000,000 the first year of
operations. Of course NWC will be
recovered at the projects end. Conch
Republic has a 35 percent corporate tax rate and a 12 percent required return.”