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Assignment 2 (A2): Economic Analysis (NPV, ROI, and Payback) Perform a financial analysis for a project where the projected costs and benefits are spread
Assignment 2 (A2): Economic Analysis (NPV, ROI, and Payback) Perform a financial analysis for a project where the projected costs and benefits are spread over five years with the following data: . Estimated costs are $100,000 in Year 1 and $25,000 each for years 2, 3, 4, and 5. . 5. . . Estimated benefits are $0 in Year 1 and $80,000 each for years 2, 3, 4, and Use a discount rate of 8% For layout see example (PDF format) in D2L, in the same module as this assignment. Answer each of the questions below to complete your assignment. Use the same numbers as the assignment when you give your answer, I only grade answers that correspond the assignment questions. All answers must be in the same excel worksheet you create in question "1". 1. Create an Excel spreadsheet to show costs and benefits over the four-year period. Layout should be similar to the example demonstrated in class and also shown in the PDF format attached within this assignment module. 2. Calculate cash flow 3. Show the discount factor 4. 5. Show discounted costs and discounted benefits Calculate and clearly display the NPV (Net Present Value), ROI (Return on Investment), and year in which payback (break-even point) occurs. 6. Show a chart (line plot) depicting the payback. 7. Write a paragraph explaining whether you would recommend investing in this project or not, and why. In writing your response to "Why" you will invest or not invest, be sure to use NPV, ROI, and Payback as the source of your argument; all three must be used. This write-up should be done in the same Excel worksheet, do NOT use a separate word processor for this question [about 150- word response].
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