3M is Considering building a new plant or purchasing an existing company cost will be 5000 million for either option discount rate for either project is 12% utilizing capital budgeting tools provide recommendation to 3M please show in XL and how numbers are composed

Special Problem 3: Capital Budgeting Analysis Objective: Students demonstrate ability to 1. Utilize several capital budgeting concepts. 2. Complete required calculations. 3. Develop a written recommendation to senior management based on resulting data. Directions: Utilizing cell references and formulas, use the data in the Excel file provided to prepare example. then utilize the NPV formula under the text page 386 for example. of Return - utilize the IRR and MIRR Excel. *See Table 12.5 in text page 388 A: Payback period calculation. Textbook page 384 has B. Net Present Value work the process step-by-step Formulas, Financials, tab. *See Table 12.4 in C. Internal Rate of Return and Modified Internal Rate formulas under the Formulas, Financial, tab in for example. Build New: Year Cash Flows Purchase: Year Cash Flows Discount Rate Y 5000 1000 1500 2000 12% Payback Cash Flows Cumulative Cash Flows Payback (in years) Net Present Value Year Cash Flows PV of Cash Flows Sum of Inflows NPV Using Excel Financial Formula Internal Rate of Return (IRR) Using Excel Financial Formula Payback Cash Flows Cumulative Cas Payback (in yea Net Present Va Year Cash Flows PV of Cash Flow Sum of Inflows NPV Using Excel Fin Internal Rate a Using Excel Fin 5000 1000 1500 1000 1500 4000 Modified Internal Rate of Return (MIRR) Year Cash Flows Modified Inter Year Cash Flows 1000 1500 MIRR using MIRR Excel Formula 5% MIRR using MI Purchase: Discount Rate ear Discount Rate 12% Cash Flows 4500 1500 1000 500 12% Payback Cash Flows Cumulative Cash Flows Payback (in years Net Present Value Year Cash Flows PV of Cash Flows Sum of Inflows NPV Using Excel Financial Formula Internal Rate of Return (IRR) Using Excel Financial Formula 5000 4500 1500 1000 500 -5000 4500 1500 1000 500 Modified Internal Rate of Return (MIRR Year Cash Flows 4500 1500 1000 500 Reinvestment Rate Reinvestment Rate 5% MIRR using MIRR Excel Formula