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Consider the following information: Year 0 1 2 3 4 5 6 7 8 9 10 -800 380 335 290 245 200 155 110
Consider the following information: Year 0 1 2 3 4 5 6 7 8 9 10 -800 380 335 290 245 200 155 110 65 20 20 -25 B -800 90 120 150 180 210 240 270 300 330 360 a) In your spreadsheet, plot the NPV curves and identify the switching discount rate. Be sure to fully label your diagram including any relevant intercepts, axis etc. Switching discount rate = Blank 1% Provide your answer to two decimal places. Do not include % in your answer. b) If the discount rate is 10%, which project should we undertake? Explain your answer in detail in your spreadsheet = Project Blank 2 c) In your spreadsheet, provide an intuitive explanation why we would switch between projects. Answer = Blank 3 (provide up to 5 key words in the box. Include your full answer in your spreadsheet.) Provide your answers to two decimal places. Do not include any commas (,) "$" or "%" in your answers. Ensure you show all your working in your spreadsheet. Provide a detailed explanation in your spreadsheet of the comparison of the projects. Marks will be deducted if you do not explain your answers.
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