1. The file attached here contains selected information from…
1. The file attached here contains selected information from S&P 500 companies. Mid-term.xlsx (1) Use Table tool, create a calculated column to calculate the total buy and hold return from 2016 to 2018. Name it “3-year total return”. Make a Pivot table that shows the average 3-year total return by GICS Sector. (2) Add the GICS Industry field to the pivot table. Which industry was the best performer in the worst sector over the past 3 years? Sort the fields in your pivot table so that this sector and industry is at the very top of the table. (3) Create a new pivot table from the original data that shows the top 20 GICS sub-Industries by sum of market capitalization. Also include a count of the number of companies in each sub-industry. (4) Create a new pivot table that shows beta and the 3-year total return for each company. Then copy paste the data to another location in the same page. Create a regular XY Scatter chart of the data. Is there an obvious relationship between beta and historical 3-year returns? Insert a textbox to briefly answer it. 2. Create a new tab in the same worksheet for Question 2. Adventure Island is considering the purchase of a new log flume ride. The cost to purchase the equipment is $5,000,000, and it will cost an additional $380,000 to have it installed. The equipment has an expected life of 6 years, and it will be depreciated using straight-line method. Management expects to run about 150 rides per day, with each ride averaging 25 riders. The season will last for 120 days per year. In the first year, the ticket price per rider is expected to be $5.25, and it will be increased by 4% per year. The variable cost per rider will be $1.40, and total fixed costs will be $425,000 per year. After six years, the ride will be dismantled at a cost of $215,000 and the parts will be sold for $450,000. The cost of capital is 8.5%, and its marginal tax rate is 35%. (1) Set up the input, calculate initial outlay, annual after-tax cash flow for each year, and the terminal cash flow. (2) Calculate NPV, IRR, MIRR of the new equipment. Is the project acceptable. (3) Create 3 separate data tables to show NPV as a function of 3 separate input variables. You can decide which variables to use and what values to use. Create 3 separate sensitivity diagram for each data table. (4) Create a best-case scenario and a worst-case scenario. Change 3 variables of your choice, report NPV, IRR, MIRR in the scenario summary. (5) If there’s a 70% probability of base case, 15% probability of best case, and 15% probability of worst case, calculate expected NPV, Variance, Stand deviation, and the probability of a negative NPV.
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