FIN-220, Fall 2018

Capital Budgeting Excel Assignment

Description:

Rider Company is presented with the following two mutually exclusive projects. The required return for both projects is 14.5%.

Year Project X Project Y

0 -$150,500 -$372,500

1 68,700 159,400

2 76,900 193,300

3 71,400 154,900

4 40,600 110,500

(a) What is the IRR for each project?

(b) What is the NPV for each project?

(c) Which, if either, of the projects should the company accept? Explain why?

Requirements:

You are required to evaluate the project using Excel software with NPV and IRR functions. Your Excel file with answers to questions (a), (b), and (c) must be. Your answers for NPV and IRR (in percentage) must display at least two decimal places.

Please try to email the excel file so I would know how you got this answers and the process of it. If you don't mind. Thank you.