please post with excel spreadsheet Prepare an Excel spreadsheet on your own to present...

50.1K

Verified Solution

Question

Accounting

please post with excel spreadsheet
Prepare an Excel spreadsheet on your own to present your financial decisions for two projects using NPV, IRR and the Payback Period techniques. You will be graded on your spreadsheet (0-10 pts.)
There are two mutually exclusive projects A and B. Both projects require an investment of $10 million but the timing is different for the rest of the expected net cash flows.
For project A For project B
Period 0 = - $10.0 m - $10.0 million
Period 1 = 6.5 3.5 m
Period 2 3.0 3.5
Period 3 = 3.0 3.5
Period 4 = 1.5 3.5
Total Inflow = $14.0m $14.0m
Prepare 3 possible scenarios for these projects. Use the 5% discount rate (WACC) for a forecast if these are considered low risk projects, 10% if we think they have a normal amount of risk and 15% if we decide that these are high risk projects.
1 Show the NPVs, the IRRs and the Payback Periods for each for each scenario on your spreadsheet.
2 Assume these projects are mutually exclusive. Which ones would you choose.
a) using a 5% discount rate?
b) using a 10% discount rate?
c) using a 15% discount rate?
3 Assume the projects are independent, then which ones would you choose at each discount rate in each scenario?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students