Hi, I have this assignment and I am kindly asking you to please assist me. Based on the selected company ( Nike, 10-k file) balance sheet for May 31, 2020 , the company's property, plant and equipment is $4,866 ,million.

Question:

The company's CEO is looking to expand its operations by investing in new property, plant, and equipment. it requires some capital budgeting analysis that will determine whether the company should invest in these new plant assets.

Requirements

• The firm is looking to expand its operations by 10% of the firm's net property, plant, and equipment. (Calculate the amount by taking 10% of the property, plant, and equipment figure that appears on the firm's balance sheet.)
• The estimated life of this new property, plant, and equipment will be 12 years. The salvage value of the equipment is 5% of the property, plant and equipment's cost.
• The annual EBIT for this new project will be 18% of the project's cost.
• The company uses the straight-line method to depreciate this equipment. Also assume that there will be no increases in net working capital each year. Use 35% as the tax rate in this project.
• The hurdle rate for this project will be the WACC find on a financial website

Calculate the amount of property, plant, and equipment and the annual depreciation for the project

Convert the project's EBIT to free cash flow for the 12 years of the project.

Calculate the following capital budgeting results for the project

• Net present value
• Internal rate of return
• Discounted payback period.

Recommendation for acceptance or rejection of the project. Excel spreadsheets.