Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Looking for the actual spreadsheet calculations to verify work. I think I'm calculating wrong columns You have to evaluate an Infrastructure investment project in the

image text in transcribed

Looking for the actual spreadsheet calculations to verify work. I think I'm calculating wrong columns

You have to evaluate an Infrastructure investment project in the P R. of China. To make a solid recommendation you have to calculate the NPV, Payback Perlod, and the IRR as we discussed in class. You have two scenarios you need to evaluate before making your final recommendation Alternative 1 The first option includes an initial investment of 19,500,000 and an annual maintenance fee of 500,000 at the end of each year. The rate of return i=0.1 (10%). The revenue is shown below. Calendar Year 2011 Cash Inflow Ft 2012 2013 2014 2015 2016 Cash Outflow Year Ao 0 19,500,000 1 500,000 2 500,000 3 500,000 4 500.000 5 500,000 3,950,000 6,010,000 7.925,000 10.300.000 12,000,000 Alternative 2 The second option includes an initial investment of 19,500,000 as well, but does not require a maintenance fee at the end of each year. The rate of return it 0.1(1016] However, the revenue is fixed at 6.755,000 for each of the five years. Cash Calendar Year Cash Inflow Ft Outfiow Year 0 19,500 000 1 2011 2012 2013 2014 2015 2 3 6.755.000 6,755.000 6,755 OK 6,75.000 6,755 000 5 After you calculate the NPV Payback period and the for each optionale recommendation regarding which option you would recommend b! Your churcorist is nou that an aontate at should pected. What is the impact on your att Perform a sensitivity analysis to test your conclusions. Would that change your opinion or not

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Health Care Finance

Authors: William O. Cleverley

3rd Edition

0834203413, 978-0834203419

More Books

Students also viewed these Finance questions