EMU Research Team has a project. It requires $300,000/year investments for the next 4 years. From the 5 th year onwards, it receives FCF of $475,00/year for the next 10 years (i.e., year 5 to 14) EMU invests in projects that provide at least 15.0% a year return. What is the NPV of EMU research project? 012345..................14 NPV=? 300K 300K 300K 300k 475K ................ 475K Use TVM function of a Financial Calculator Alternately, Use CF & NPV functions of a Financial Calculator

2. Wayne State Research Team has a project. It requires $400,000/year investments for the next 4 years. On the 5 th year it receives FCF of $475,00. Then it grows by 5.0% a year indefinitely EMU invests in projects that provide at least 15.0% a year return. What is the NPV of Wayne State research project? 5% 01234567Infinity NPV=? 400K 400K 400K 400 475K ? ? ? HV 5 =? Formula: Constant Growth: HV5 = CF 6 [WACC g] = [CF5 x (1 + g)] [WACC g] Use TVM function of a Financial Calculator Alternately, Use CF & NPV functions of a Financial Calculator