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Applying Capital Budgeting Techniques Using MS Excel: Laboratory Exercise

This document provides instructions for students to complete a laboratory exercise applying capital budgeting techniques using Microsoft Excel. It includes objectives, equipment needed, basic principles, and a step-by-step procedure to enter financial data for multiple projects, calculate net present value, profitability index, and internal rate of return to evaluate which project is most preferred. The document also provides formatting guidelines and a grading rubric for the output.

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Ma Trixia Alexandra Cuevas
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© © All Rights Reserved
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461 views4 pages

Applying Capital Budgeting Techniques Using MS Excel: Laboratory Exercise

This document provides instructions for students to complete a laboratory exercise applying capital budgeting techniques using Microsoft Excel. It includes objectives, equipment needed, basic principles, and a step-by-step procedure to enter financial data for multiple projects, calculate net present value, profitability index, and internal rate of return to evaluate which project is most preferred. The document also provides formatting guidelines and a grading rubric for the output.

Uploaded by

Ma Trixia Alexandra Cuevas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BM1915

Laboratory Exercise
Applying Capital Budgeting Techniques Using MS
Excel

Objectives:

At the end of the exercise, the students should be able to:

 Evaluate capital investment projects using different capital budgeting techniques.

Equipment:

 Computer
 MS Excel

Basic Principles:
Refer to the information provided in 11 Laboratory Exercise 1.

Procedure:

1. Open MS Excel file used for 11 Laboratory Exercise 1 and start a new worksheet.
2. Enter the information following the correct formats.

For the given values, use the following:

Heading, Column Titles Font style: Arial, bold


Font size: 10 pt.
Alignment: Center
Row height: 15
Column width: 12
Account Titles Font style: Arial
Font size: 10 pt.
Alignment: Center
Row Height: 15
Column Width: 12
Amounts Font style: Arial
Font size: 10 pt.
Alignment: Center
Row Height: 15
Column Width: 12

For the answer and problem solving, use the following format:

Heading, Column Titles Font style: Arial, bold


Font size: 10 pt.
Alignment: Center
Row height: 15
Merged cell

11 Laboratory Exercise 2 *Property of STI


Page 1 of 4
BM1915

Account Titles Font style: Arial


Font size: 10 pt.
Alignment: Center
Row Height: 15
Column Width: 12
Merged cell
Amounts Font style: Arial
Font size: 10 pt.
Alignment: Center
Row Height: 15
Column Width: 12

3. Enter the following information in Figure1 for the given values. This was the same given values in 11
Laboratory Exercise 1.

Figure 1. Given values

4. In answering the questions, consider the following information:


 Assume the net cash inflows for all the projects are discounted at 10% cost of capital.
 The projects are mutually exclusive.
 Round off your answers to two (2) decimal places.
 For present value factors, round off in three (3) decimal places or you may refer to the present
value table in 11 Handout 1.
 After computing the net present value and profitability index, evaluate which is the most preferred
project.

5. Refer to Figures 2-5 for problem solving.

Figure 2. NPV of project A


Figure 3. NPV of project B

Figure 4. NPV of project C

Note: You may use another format in computing the net present value as provided for in the handout.

Figure 5. Profitability indices of the projects

6. Enter the following information in Figure 6.

Figure 6. Given values


7. Refer to Figures 7-9 for problem solving.

Figure 7. NPV of the project

Figure 8. Profitability index of the project

Figure 9. Internal rate of return of the project

8. Save again the Excel file.

Rubric for grading the output:


CRITERIA PERFORMANCE INDICATORS POINTS
Neatness and The spreadsheet has exceptional formatting, and the information is
20
Organization well-organized.
The spreadsheet formulas are well-developed and will correctly
Formulas 30
determine the needed information.
Titles, Labels, and
The spreadsheet contains clearly labeled rows and columns. 10
Headings
The spreadsheet meets all the necessary requirements to interpret
Content 40
the result of the operation.
TOTAL 100

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