Excel and Writing Case Assignment Description: ABC Corporation has a machine that requires repairs or should be replaced. ABC has evaluated the two options and calculated the cash flows resulting from each option as follows:

Option A: Repair the Machine

Year Cash Flow

0 -50,000

1 15,500

2 20,100

3 18,900

4 17,100

5 13,700

Option B: Buy a new Machine

Year Cash Flow

0 -400,000

1 51,300

2 155,000

3 127,800

4 126,900

5 125,100

You have recently been hired by ABC Corporation and your first assignment is to help them decide which of these two options should be pursued. You would like to apply Capital Budgeting and Time Value of Money concepts you have learnt to analyze the problem and present your recommendation to your boss, Ms. Jane Austen.

Conduct the analysis by calculating the following: Payback Period Net Present Value (NPV) Internal Rate of Return (IRR) Modified Internal Rate of Return MIRR Profitability Index (PI) Calculate and graph the NPV profile for both options Calculate cross-over rate if there is one The company has a Weighted Average Cost of Capital (WACC) of 8%.

For this analysis, your boss asked you to conduct a sensitivity analysis by calculating NPV at three different discount rates: 8% (the current WACC), 10% and 14%.

You must use the built-in financial functions and logical functions in Excel spreadsheet. The spreadsheet should be a model such that if the cash-flows are changed, the answer and recommendation should change automatically in the spreadsheet. You must pay special attention to calculating Payback and Discounted Payback measures and it should change as inputs are changed. Please use =IF() function to display your decision. Your Excel must also have a properly labeled graph for NPV Profile for two projects.

Please post with excel solutions - Edit: Make an excel spread sheet showing the function / calculations with formula so they automatically calculate.