Ratio analysis for Atlantico, Tastee Fruit, and acquisition of Corporation A or B

A company is thinking about acquiring another corporation. You have two
choices; the cost of each choice is $250,000. You cannot spend more
than that, so acquiring both corporations is not an option. The
following are your critical data:

Corporation A:







Revenues =

100,000 in year one, increasing by 10% each year.

Expenses =

20,000 in year one, increasing by 15% each year.

Depreciation Expense 5,000 each year





Tax Rate =

25%







Discount Rate = 10%









Corporation B:







Revenues =

150,000 in year one, increasing by 8% each year.

Expenses =

60,000 in year one, increasing by 10% each year.

Depreciation Expense 10,000 each year.





Tax Rate =

25%







Discount Rate = 11%









You must compute and analyze items using a Microsoft Excel spreadsheet.
Make sure that all calculations can be seen in the background of the
applicable spreadsheet cells. In other words, leave an audit trail so
that others can see how you arrived at your calculations and analysis.

 a. A 5-year projected income statement.

 b. A 5-year projected cash flow

 c. Net Present Value

 d. Internal Rate of Return

 e. Payback Period

  f. Profitability Index

 g. Discounted Payback Period

 h. Modified Internal Rate of Return