Assignment Content Page 1 of 2 NOTE: For this project you must submit documents supporting your answers in the submission section - showing step-by-step how you reached your answers. You can use excel to find the IRR only. Everything else must be shown as a calculation. Module 4 Assignment You, as the project manager, have been asked to recommend which project your company should move forward with. Your company has a total of $350,000 in debt at 5% interest and $400,000 in equity at 12% rate of return. Project 1 is to build a medium-sized garage for a client over three years. The client will pay $10,000 as a deposit immediately, $40,000 the year after and $85,000 in the final year. Your company has a small loan of $10,000 with 5% interest to go towards this project that must be paid back in the end. $50,000 of materials will be bought all at once in the first year. As well as a piece of equipment that requires a $10,500 down payment and yearly payments of $1500 following. Labor for the project is $15,000 immediately and $6000 per year after. Administration costs including taxes are $4000 for set up and $1000 per year after. Project 2 is the purchase and installation of a new piece of equipment for your company with a life span of 3 years. The equipment costs $50,000 up front and $9,000 to run in the following years. You have the same sources of funding (loan and investor's equity) and administration costs as project 1. The equipment will save your company $25,000 beginning the year after installation and has a salvage value of $12,000 at the end of its lifespan. Question 4 2. Evaluate each project by finding the following and show your work to receive full marks. EXCEL CAN BE USED FOR IRR ONLY. Everything else must be done by hand (you can drop the file showing your work in the additional content section: a) Weighted average cost of capital (WACC) (1 mark) Blank 1 b) IRR for both projects (2 marks) 1: Blank 2, 2: Blank 3 c) NPV for both projects (2 marks) 1: $Blank 4, 2: $Blank 5 d) Discounted payback period for both projects (2 marks) 1: Blank 6, 2: Blank 7 Blank 1 Add your answer Blank 2 Add your answer Blank 3 Add your answer Blank 4 Add your answer Blank 5 Add your answer Blank 6 Add your answer Blank 7 Add your answer 7 Points Question 5 3 Points Based on the information provided, state whether the projects are independent or mutually exclusive, what your recommendation would be and why. Use the editor to format your answer Question 6 3 Points If the salvage value was removed from project B and the materials in project A increased by $6,000, would your recommendation change? Use the editor to format your answer