Accept or Reject?

Calculate NPV, IRR, MIRR, Payback and Discounted Payback for the following Project. Remember to show your work! The Walt Disney Company is evaluating whether or not to build Rock N Roller Coaster, a very popular roller coaster at Disney World, at California Adventure. The WACC for this project is 7.5% CF 0 = -$20 million, CF 1 = $4 million, CF 2 = $5.5 million, CF 3 = $7 million, CF 4 = $6 million, CF 5 = $5 million.

NPV: WACC for this project is 7.5% CF 0 = -$20 million CF 1 = $4 million CF 2 = $5.5 million CF 3 = $7 million CF 4 = $6 million CF 5 = $5 million

IRR: WACC for this project is 7.5% CF 0 = -$20 million CF 1 = $4 million CF 2 = $5.5 million CF 3 = $7 million CF 4 = $6 million CF 5 = $5 million

MIRR: WACC for this project is 7.5% CF 0 = -$20 million PV of Negative CFs? CF 1 = $4 million FV of Positive CFs? CF 2 = $5.5 million N = ? CF 3 = $7 million PV =? CF 4 = $6 million PMT = ? CF 5 = $5 million FV = ? Solve for I/YR=?

Calculating Payback: Rock N Roller Coasters Payback Calculation:

Time period	0	1	2	3	4	5
CF t	-20	4	5.5	7	6	5
Cumlative CF's	-20

Payback =? + / = ? years WACC = 7.5%

Calculating Discounted Payback: Rock N Roller Coasters Payback Calculation:

Time period	0	1	2	3	4	5
CF t	-20	4	5.5	7	6	5
Discounted CFt	-20
Cumulative CF's	-20

Payback = ? + / = ? years WACC = 7.5%

In paragraph format, answer the following questions: Based on the criteria for each methodology, NPV, IRR, MIRR, Payback and Discounted Payback, would Disney accept or reject this project and why?

If you were the Financial Analyst in charge of evaluating this project, what recommendation would you make to the company regarding accepting or rejecting this project and why?