1. Google LLC

Scenario: Capital Budgeting Decision

Data: Google LLC is considering a new project with an initial investment of $10,000,000. The project is expected to generate annual cash flows of $3,000,000 for the next 5 years. Google LLC's required rate of return is 12%.

Requirements:

1. Calculate the net present value (NPV) of the project.
2. Determine the internal rate of return (IRR) of the project.
3. Discuss the importance of NPV and IRR in capital budgeting decisions for Google LLC.
4. Analyze whether Google LLC should accept or reject the project based on NPV and IRR.
5. Evaluate the sensitivity of the project's NPV to changes in cash flow estimates.