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FNCE 6 2 3 Financial Management Individual assignment Belgravia Petroleum Inc. is trying to evaluate a generation project with the following cash flows: Year Cashflow

FNCE 623 Financial Management
Individual assignment
Belgravia Petroleum Inc. is trying to evaluate a generation project with the following cash flows:
Year
Cashflow
0
-$450,000,000
1
$63,000,000
2
$85,000,000
3
-$43,000,000
4
$145,000,000
5
$175,000,000
6
-$60,000,000
7
$70,000,000
8
$72,000,000
Construct a spreadsheet and calculate the following (the required rate of return is 12%):
Payback period
Discounted payback period
Internal rate of return (IRR)
Modified IRR
The discounting approach
The reinvestment approach
The combination approach
Net present value (NPV)
Based on your analysis, should the company take the project? Why?
IMPORTANT: Use MS Excel functions (PV, FV, NPV, and IRR) in your spreadsheet.
You can interpret/explain your answers in the excel sheet.

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