Calculate the NPV and IRR for this project and decide if it should be undertaken.

A U.S. based company wants to establish a subsidiary in Japan, use the following information.

-The initial investment is 100 million YEN

-The project is expected to last 5 years with a salvage value of 30 million YEN

-The prices, demand, and variable costs are as follows:

Year Price {your currency} Demand (units) VC/unit in YEN

1 200 600,000 180

2 210 700,000 190

3 220 800,000 200

4 220 800,000 210

5 200 500,000 210

-Fixed costs in YEN are expected to be 10 million / year

-The Spot exchange rate for Yen is (direct quote = 1 USD = 136.33 JYP and indirect quote = 1 JPY = 0.0073 USD

-The YEN is expected to behave as follows:

Year 1: Loss of 3%

Year 2: Additional loss of 3%

Year 3: Same as year 2

Year 4: Gain of 3%

Year 5: Same as year 4

-The company expects the NWC requirements as follows:

Initial NWC Investment of 30 million YEN

Annual NWC Requirements = 0 million YEN

Japan will impose a 25% tax on income and a 10% tax on remitted funds

There are no U.S. taxes

All Cash flows will be sent to the U.SA parent company at the end of the year

Depreciation expense is 10 years using the straight-line method

The Required Rate of return on the project is 15%

SHOW ALL CALCULATIONS/FORMULAS and using Excel is preferred :)