All answers must be prepared on an Excel spreadsheet with supporting calculations documented.

$1).$ Using the following data:

$$ Initial Investment $=$ $$10,000,000$

$$ Cash Inflow $$ Year $1=$ $$3,000,000$

$$ Cash Inflow $$ Year $2=$ $$3,500,000$

$$ Cash Inflow $$ Year $3=$ $$4,000,000$

$$ Cash Inflow $$ Year $4=$ $$4,900,000$

$$ Cash Inflow $$ Year $5=$ $$5,000,000$

a$.$ Calculate Internal Rate of Return

b$.$ Calculate Net Present Value $($assuming a required return of $8\%)$

$2).$ Using the following data:

$$ Debt

o Market value $-$ $$7,000,000$

o Current yield to maturity $8\%$

$$ Equity

o Market value $-$ $$35,000,000$

$$ Tax rate $35\%$

$$ Expected return on market $10\%$

$$ Current $10$ year US Treasury $2\mathrm{.}3\%$

$$ Beta $1\mathrm{.}60$

a$.$ Construct a pie chart of the firm$$s capital structure $($market values$)$

b$.$ Calculate weighted average cost of capital

$3).$ Using the following free cash flow data:

Year Cash Flow

$2019$ $$3,000,000$

$2020$ $$3,400,000$

a$.$ Calculate the growth in cash flow between $2019$ and $2020$

b$.$ Prepare a $5$ year cash flow forecast based upon the rate of growth in cash flow $(2021-2025)$

c$.$ Calculate the net present value of the forecasted cash flows assuming an investment cost of $$18,500,000$ in the beginning of $2021$

Estimate cost of capital using the following data:

$$ Market value of debt $-$ $$600,000$

$$ Market value of equity $-$ $$1,400,000$

$$ Current yield on debt $7\mathrm{.}3\%$

$$ Tax rate $35\%$

$$ Expected market return $12\%$

$$ Current $10$ year US Treasury $3\mathrm{.}8\%$

$$ Beta $2\mathrm{.}1$

d$.$ State your opinion on whether you would make the investment and why?