Identify the following information on Citigroup:
- Revenues = increasing by 8% each year
- Expenses = increasing by 10% each year
- Tax rate = 25%
- Discount rate = 10%
Use the information from their data online for the first year and then these % going forward.
Compute and analyze the financial data using a Microsoft® Excel® spreadsheet. Make sure all calculations can be seen in the background of the applicable spreadsheet cells. In other words, leave an audit trail so others can see how you arrived at your calculations and analysis. Items should be submitted in Microsoft® Excel®; indicate your recommendation in the Microsoft® Excel® spreadsheet:
- Calculate the 5-year projected income.
- Calculate a 5-year projected cash flow.
- Calculate net present value (NPV).
- Calculate the internal rate of return (IRR).
- Determine if the team would recommend acquiring this company based on the 4 calculations above; do you recommend acquiring this company?
Identify a quantifiable measure for the company such as service time, percent of errors, etc. Select one of the following quality control tools to evaluate this data:
- Flow chart
- Cause and Effect (Fishbone) Diagram
- Pareto Chart
- Control Charts
- Scatter Diagrams
Create and Present a 16-slide Microsoft® PowerPoint® presentation, including detailed speaker notes or voiceover:
- Define the answers you calculate in Part I.
- Analyze the results you arrived at in Part I.
- Interpret the answers you calculated.
- Present the rationale behind each item and why it supports the team’s decision.
- Describe the relationship between NPV and IRR. Hint: The key factor is the discount rate used.