Please help (see attached). Using JCPenney for company.

FIN515: Week 7 Project - Capital Budgeting Analysis Once again, your team is the key financial management team for your company. The company's CEO is now looking to expand its operations by investing in new property, plant, and equipment. Your team recently calculated the WACC for your company, which will now be useful in evaluating the project's effectiveness. You are now asked to do some capital budgeting analysis that will determine whether the company should invest in these new plant assets. The parameters for this project are: Your team will be using the same company for this project that you used in the Week 6 project. The company is now looking to expand its operations and wants you to do some analysis using key capital budgeting tools to do this. The parameters for this project are as follows. The firm is looking to expand its operations by 10% of the firm's net property, plant, and equipment. (Calculate this 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 will be 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 will use the straight-line method to depreciate this equipment. Also assume that there will be no increases in net working capital each year. Use the same marginal tax rate that you used in the Week 6 project. The hurdle rate for this project will be the WACC that you calculated in Week 6. Deliverable for this Project Prepare a narrated PowerPoint presentation using VoiceThread or Webex that will highlight the following items. Your calculations for the amount of property, plant, and equipment and the annual depreciation for the project Your calculations that convert the project's EBIT to free cash flow for the 12 years of the project. The following capital budgeting results for the project o Net present value o Internal rate of return o Discounted payback period. Your discussion of the results that you calculated above, including a recommendation for acceptance or rejection of the project Once again, you may embed your Excel spreadsheets into your document. Be sure to follow APA standards for this project. 1 FIN515: Week 7 Project - Capital Budgeting Analysis Grading Rubric Possible Points Calculation of Cost of Project Estimation of Cash Flows Capital Budgeting Analysis Form Criteria and Point Range 0-3 8 12 12 8 4-6 7-9 10-12 All calculations are incorrect, or not presented. Calculation of PP&E, salvage value, or annual depreciation is incorrect. Cost of PP&E is mostly correct with some minor calculation errors. 0-3 All aspects of the cash flow calculation are incorrect, or not presented. 4-6 Significant, but identifiable errors are presented in the calculation to convert income to cash flows.. 0-2 All of the capital budgeting calculations are incorrect, or not presented. 3-4 Two errors noted in the NPV, IRR, and Discounted Payback Period calculations. 7-9 Cash flows are properly converted from accrual-based net income to cash flows from the project, with minor errors. 5-6 One error noted in the NPV, IRR and Discounted payback period calculations. Cost of Property, plant and Equipment and annual depreciation correctly calculated. 10-12 Cash flows are properly converted from accrual-based net income to cash flows from the project. 0-2 Poor writing and presentation skills, or no presentation provided. 3-4 Several problems noted in regard to writing and presentation skills. 5-6 Writing and presentation done well with a few minor errors 2 7-8 All of the NPV, IRR, and Discounted Payback period calculations are correct. 7-8 Virtually no errors in writing or presentation. J. C. Penney Company Income Statement 2/1/2014 1/31/2015 1/30/2016 11,859,000 8,367,000 3,492,000 12,257,000 7,996,000 4,261,000 12,625,000 8,074,000 4,551,000 3,918,000 215,000 601,000 -1,242,000 3,797,000 87,000 631,000 -254,000 3,940,000 84,000 616,000 -89,000 -114,000 -1,356,000 352,000 -1,708,000 -430,000 -1,392,000 -34,000 -288,000 406,000 -694,000 23,000 -751,000 -10,000 -99,000 405,000 -504,000 9,000 -523,000 -1,278,000 - -717,000 - -513,000 - -1,278,000 -717,000 -513,000 Particulars (All Amounts are in Thousands) Total Revenue Cost of Revenue Gross Profit Operating Expenses Research Development Selling General and Administrative Non Recurring Others Total Operating Expenses Operating Income or Loss Income from Continuing Operations Total Other Income/Expenses Net Earnings Before Interest and Taxes Interest Expense Income Before Tax Income Tax Expense Minority Interest Net Income From Continuing Ops Non-recurring Events Discontinued Operations Extraordinary Items Effect Of Accounting Changes Other Items Net Income Preferred Stock And Other Adjustments Net Income Applicable To Common Shares J. C. Penney Company Balance Sheet 2/1/2014 1/31/2015 1/30/2016 113,000 1,402,000 193,000 2,935,000 190,000 4,833,000 5,619,000 1,349,000 11,801,000 119,000 1,199,000 172,000 2,652,000 189,000 4,331,000 5,148,000 830,000 10,309,000 119,000 781,000 231,000 2,721,000 166,000 4,018,000 4,816,000 608,000 9,442,000 2,146,000 700,000 2,846,000 4,901,000 632,000 335,000 8,714,000 2,100,000 56,000 2,156,000 5,265,000 611,000 363,000 8,395,000 2,285,000 127,000 2,412,000 4,668,000 618,000 425,000 8,133,000 152,000 -1,008,000 4,571,000 -628,000 3,087,000 3,087,000 152,000 -2,494,000 4,606,000 -350,000 1,914,000 1,914,000 153,000 -3,007,000 4,654,000 -491,000 1,309,000 1,309,000 Period Ending (All Amounts are in Thousands) Current Assets Cash And Cash Equivalents Short Term Investments Net Receivables Inventory Other Current Assets Total Current Assets Long Term Investments Property Plant and Equipment Goodwill Intangible Assets Accumulated Amortization Other Assets Deferred Long Term Asset Charges Total Assets Current Liabilities Accounts Payable Short/Current Long Term Debt Other Current Liabilities Total Current Liabilities Long Term Debt Other Liabilities Deferred Long Term Liability Charges Minority Interest Negative Goodwill Total Liabilities Stockholders' Equity Misc. Stocks Options Warrants Redeemable Preferred Stock Preferred Stock Common Stock Retained Earnings Treasury Stock Capital Surplus Other Stockholder Equity Total Stockholder Equity Net Tangible Assets Date 1/29/2016 1/28/2016 1/27/2016 1/26/2016 1/25/2016 1/22/2016 1/21/2016 1/20/2016 1/19/2016 1/15/2016 1/14/2016 1/13/2016 1/12/2016 1/11/2016 1/8/2016 1/7/2016 1/6/2016 1/5/2016 1/4/2016 12/31/2015 12/30/2015 12/29/2015 12/28/2015 12/24/2015 12/23/2015 12/22/2015 12/21/2015 12/18/2015 12/17/2015 12/16/2015 12/15/2015 12/14/2015 12/11/2015 12/10/2015 12/9/2015 12/8/2015 12/7/2015 12/4/2015 12/3/2015 12/2/2015 12/1/2015 11/30/2015 11/27/2015 11/25/2015 11/24/2015 11/23/2015 11/20/2015 Adj Close 1940.2400 1893.3600 1882.9500 1903.6300 1877.0800 1906.9000 1868.9900 1859.3300 1881.3300 1880.3300 1921.8400 1890.2800 1938.6801 1923.6700 1922.0300 1943.0900 1990.2600 2016.7100 2012.6600 2043.9399 2063.3601 2078.3601 2056.5000 2060.9900 2064.2900 2038.9700 2021.1500 2005.5500 2041.8900 2073.0701 2043.4100 2021.9399 2012.3700 2052.2300 2047.6200 2063.5901 2077.0701 2091.6899 2049.6201 2079.5100 2102.6299 2080.4099 2090.1101 2088.8701 2089.1399 2086.5901 2089.1699 Holding Period Return of Two Years 8.14% 11/19/2015 11/18/2015 11/17/2015 11/16/2015 11/13/2015 11/12/2015 11/11/2015 11/10/2015 11/9/2015 11/6/2015 11/5/2015 11/4/2015 11/3/2015 11/2/2015 10/30/2015 10/29/2015 10/28/2015 10/27/2015 10/26/2015 10/23/2015 10/22/2015 10/21/2015 10/20/2015 10/19/2015 10/16/2015 10/15/2015 10/14/2015 10/13/2015 10/12/2015 10/9/2015 10/8/2015 10/7/2015 10/6/2015 10/5/2015 10/2/2015 10/1/2015 9/30/2015 9/29/2015 9/28/2015 9/25/2015 9/24/2015 9/23/2015 9/22/2015 9/21/2015 9/18/2015 9/17/2015 9/16/2015 9/15/2015 2081.2400 2083.5801 2050.4399 2053.1899 2023.0400 2045.9700 2075.0000 2081.7200 2078.5801 2099.2000 2099.9299 2102.3101 2109.7900 2104.0500 2079.3601 2089.4099 2090.3501 2065.8899 2071.1799 2075.1499 2052.5100 2018.9399 2030.7700 2033.6600 2033.1100 2023.8600 1994.2400 2003.6899 2017.4600 2014.8900 2013.4301 1995.8300 1979.9200 1987.0500 1951.3600 1923.8199 1920.0300 1884.0900 1881.7700 1931.3400 1932.2400 1938.7600 1942.7400 1966.9700 1958.0300 1990.2000 1995.3101 1978.0900 9/14/2015 9/11/2015 9/10/2015 9/9/2015 9/8/2015 9/4/2015 9/3/2015 9/2/2015 9/1/2015 8/31/2015 8/28/2015 8/27/2015 8/26/2015 8/25/2015 8/24/2015 8/21/2015 8/20/2015 8/19/2015 8/18/2015 8/17/2015 8/14/2015 8/13/2015 8/12/2015 8/11/2015 8/10/2015 8/7/2015 8/6/2015 8/5/2015 8/4/2015 8/3/2015 7/31/2015 7/30/2015 7/29/2015 7/28/2015 7/27/2015 7/24/2015 7/23/2015 7/22/2015 7/21/2015 7/20/2015 7/17/2015 7/16/2015 7/15/2015 7/14/2015 7/13/2015 7/10/2015 7/9/2015 7/8/2015 1953.0300 1961.0500 1952.2900 1942.0400 1969.4100 1921.2200 1951.1300 1948.8600 1913.8500 1972.1801 1988.8700 1987.6600 1940.5100 1867.6100 1893.2100 1970.8900 2035.7300 2079.6101 2096.9199 2102.4399 2091.5400 2083.3899 2086.0500 2084.0701 2104.1799 2077.5701 2083.5601 2099.8401 2093.3201 2098.0400 2103.8401 2108.6299 2108.5701 2093.2500 2067.6399 2079.6499 2102.1499 2114.1499 2119.2100 2128.2800 2126.6399 2124.2900 2107.3999 2108.9500 2099.6001 2076.6201 2051.3101 2046.6801 7/7/2015 7/6/2015 7/2/2015 7/1/2015 6/30/2015 6/29/2015 6/26/2015 6/25/2015 6/24/2015 6/23/2015 6/22/2015 6/19/2015 6/18/2015 6/17/2015 6/16/2015 6/15/2015 6/12/2015 6/11/2015 6/10/2015 6/9/2015 6/8/2015 6/5/2015 6/4/2015 6/3/2015 6/2/2015 6/1/2015 5/29/2015 5/28/2015 5/27/2015 5/26/2015 5/22/2015 5/21/2015 5/20/2015 5/19/2015 5/18/2015 5/15/2015 5/14/2015 5/13/2015 5/12/2015 5/11/2015 5/8/2015 5/7/2015 5/6/2015 5/5/2015 5/4/2015 5/1/2015 4/30/2015 4/29/2015 2081.3401 2068.7600 2076.7800 2077.4199 2063.1101 2057.6399 2101.4900 2102.3101 2108.5801 2124.2000 2122.8501 2109.9900 2121.2400 2100.4399 2096.2900 2084.4299 2094.1101 2108.8601 2105.2000 2080.1499 2079.2800 2092.8301 2095.8401 2114.0701 2109.6001 2111.7300 2107.3899 2120.7900 2123.4800 2104.2000 2126.0601 2130.8201 2125.8501 2127.8301 2129.2000 2122.7300 2121.1001 2098.4800 2099.1201 2105.3301 2116.1001 2088.0000 2080.1499 2089.4600 2114.4900 2108.2900 2085.5100 2106.8501 4/28/2015 4/27/2015 4/24/2015 4/23/2015 4/22/2015 4/21/2015 4/20/2015 4/17/2015 4/16/2015 4/15/2015 4/14/2015 4/13/2015 4/10/2015 4/9/2015 4/8/2015 4/7/2015 4/6/2015 4/2/2015 4/1/2015 3/31/2015 3/30/2015 3/27/2015 3/26/2015 3/25/2015 3/24/2015 3/23/2015 3/20/2015 3/19/2015 3/18/2015 3/17/2015 3/16/2015 3/13/2015 3/12/2015 3/11/2015 3/10/2015 3/9/2015 3/6/2015 3/5/2015 3/4/2015 3/3/2015 3/2/2015 2/27/2015 2/26/2015 2/25/2015 2/24/2015 2/23/2015 2/20/2015 2/19/2015 2114.7600 2108.9199 2117.6899 2112.9299 2107.9600 2097.2900 2100.3999 2081.1799 2104.9900 2106.6299 2095.8401 2092.4299 2102.0601 2091.1799 2081.8999 2076.3301 2080.6201 2066.9600 2059.6899 2067.8899 2086.2400 2061.0200 2056.1499 2061.0500 2091.5000 2104.4199 2108.1001 2089.2700 2099.5000 2074.2800 2081.1899 2053.3999 2065.9500 2040.2400 2044.1600 2079.4299 2071.2600 2101.0400 2098.5300 2107.7800 2117.3899 2104.5000 2110.7400 2113.8601 2115.4800 2109.6599 2110.3000 2097.4500 2/18/2015 2/17/2015 2/13/2015 2/12/2015 2/11/2015 2/10/2015 2/9/2015 2/6/2015 2/5/2015 2/4/2015 2/3/2015 2/2/2015 1/30/2015 1/29/2015 1/28/2015 1/27/2015 1/26/2015 1/23/2015 1/22/2015 1/21/2015 1/20/2015 1/16/2015 1/15/2015 1/14/2015 1/13/2015 1/12/2015 1/9/2015 1/8/2015 1/7/2015 1/6/2015 1/5/2015 1/2/2015 12/31/2014 12/30/2014 12/29/2014 12/26/2014 12/24/2014 12/23/2014 12/22/2014 12/19/2014 12/18/2014 12/17/2014 12/16/2014 12/15/2014 12/12/2014 12/11/2014 12/10/2014 12/9/2014 2099.6799 2100.3401 2096.9900 2088.4800 2068.5300 2068.5901 2046.7400 2055.4700 2062.5200 2041.5100 2050.0300 2020.8500 1994.9900 2021.2500 2002.1600 2029.5500 2057.0901 2051.8201 2063.1499 2032.1200 2022.5500 2019.4200 1992.6700 2011.2700 2023.0300 2028.2600 2044.8101 2062.1399 2025.9000 2002.6100 2020.5800 2058.2000 2058.8999 2080.3501 2090.5701 2088.7700 2081.8799 2082.1699 2078.5400 2070.6499 2061.2300 2012.8900 1972.7400 1989.6300 2002.3300 2035.3300 2026.1400 2059.8201 12/8/2014 12/5/2014 12/4/2014 12/3/2014 12/2/2014 12/1/2014 11/28/2014 11/26/2014 11/25/2014 11/24/2014 11/21/2014 11/20/2014 11/19/2014 11/18/2014 11/17/2014 11/14/2014 11/13/2014 11/12/2014 11/11/2014 11/10/2014 11/7/2014 11/6/2014 11/5/2014 11/4/2014 11/3/2014 10/31/2014 10/30/2014 10/29/2014 10/28/2014 10/27/2014 10/24/2014 10/23/2014 10/22/2014 10/21/2014 10/20/2014 10/17/2014 10/16/2014 10/15/2014 10/14/2014 10/13/2014 10/10/2014 10/9/2014 10/8/2014 10/7/2014 10/6/2014 10/3/2014 10/2/2014 10/1/2014 2060.3101 2075.3701 2071.9199 2074.3301 2066.5500 2053.4399 2067.5601 2072.8301 2067.0300 2069.4099 2063.5000 2052.7500 2048.7200 2051.8000 2041.3199 2039.8199 2039.3300 2038.2500 2039.6801 2038.2600 2031.9200 2031.2100 2023.5699 2012.1000 2017.8101 2018.0500 1994.6500 1982.3000 1985.0500 1961.6300 1964.5800 1950.8199 1927.1100 1941.2800 1904.0100 1886.7600 1862.7600 1862.4900 1877.7000 1874.7400 1906.1300 1928.2100 1968.8900 1935.1000 1964.8199 1967.9000 1946.1700 1946.1600 9/30/2014 9/29/2014 9/26/2014 9/25/2014 9/24/2014 9/23/2014 9/22/2014 9/19/2014 9/18/2014 9/17/2014 9/16/2014 9/15/2014 9/12/2014 9/11/2014 9/10/2014 9/9/2014 9/8/2014 9/5/2014 9/4/2014 9/3/2014 9/2/2014 8/29/2014 8/28/2014 8/27/2014 8/26/2014 8/25/2014 8/22/2014 8/21/2014 8/20/2014 8/19/2014 8/18/2014 8/15/2014 8/14/2014 8/13/2014 8/12/2014 8/11/2014 8/8/2014 8/7/2014 8/6/2014 8/5/2014 8/4/2014 8/1/2014 7/31/2014 7/30/2014 7/29/2014 7/28/2014 7/25/2014 7/24/2014 1972.2900 1977.8000 1982.8500 1965.9900 1998.3000 1982.7700 1994.2900 2010.4000 2011.3600 2001.5699 1998.9800 1984.1300 1985.5400 1997.4500 1995.6899 1988.4399 2001.5400 2007.7100 1997.6500 2000.7200 2002.2800 2003.3700 1996.7400 2000.1200 2000.0200 1997.9200 1988.4000 1992.3700 1986.5100 1981.6000 1971.7400 1955.0601 1955.1801 1946.7200 1933.7500 1936.9200 1931.5900 1909.5699 1920.2400 1920.2100 1938.9900 1925.1500 1930.6700 1970.0699 1969.9500 1978.9100 1978.3400 1987.9800 7/23/2014 7/22/2014 7/21/2014 7/18/2014 7/17/2014 7/16/2014 7/15/2014 7/14/2014 7/11/2014 7/10/2014 7/9/2014 7/8/2014 7/7/2014 7/3/2014 7/2/2014 7/1/2014 6/30/2014 6/27/2014 6/26/2014 6/25/2014 6/24/2014 6/23/2014 6/20/2014 6/19/2014 6/18/2014 6/17/2014 6/16/2014 6/13/2014 6/12/2014 6/11/2014 6/10/2014 6/9/2014 6/6/2014 6/5/2014 6/4/2014 6/3/2014 6/2/2014 5/30/2014 5/29/2014 5/28/2014 5/27/2014 5/23/2014 5/22/2014 5/21/2014 5/20/2014 5/19/2014 5/16/2014 5/15/2014 1987.0100 1983.5300 1973.6300 1978.2200 1958.1200 1981.5699 1973.2800 1977.1000 1967.5699 1964.6801 1972.8300 1963.7100 1977.6500 1985.4399 1974.6200 1973.3199 1960.2300 1960.9600 1957.2200 1959.5300 1949.9800 1962.6100 1962.8700 1959.4800 1956.9800 1941.9900 1937.7800 1936.1600 1930.1100 1943.8900 1950.7900 1951.2700 1949.4399 1940.4600 1927.8800 1924.2400 1924.9700 1923.5699 1920.0300 1909.7800 1911.9100 1900.5300 1892.4900 1888.0300 1872.8300 1885.0800 1877.8600 1870.8500 5/14/2014 5/13/2014 5/12/2014 5/9/2014 5/8/2014 5/7/2014 5/6/2014 5/5/2014 5/2/2014 5/1/2014 4/30/2014 4/29/2014 4/28/2014 4/25/2014 4/24/2014 4/23/2014 4/22/2014 4/21/2014 4/17/2014 4/16/2014 4/15/2014 4/14/2014 4/11/2014 4/10/2014 4/9/2014 4/8/2014 4/7/2014 4/4/2014 4/3/2014 4/2/2014 4/1/2014 3/31/2014 3/28/2014 3/27/2014 3/26/2014 3/25/2014 3/24/2014 3/21/2014 3/20/2014 3/19/2014 3/18/2014 3/17/2014 3/14/2014 3/13/2014 3/12/2014 3/11/2014 3/10/2014 3/7/2014 1888.5300 1897.4500 1896.6500 1878.4800 1875.6300 1878.2100 1867.7200 1884.6600 1881.1400 1883.6801 1883.9500 1878.3300 1869.4301 1863.4000 1878.6100 1875.3900 1879.5500 1871.8900 1864.8500 1862.3101 1842.9800 1830.6100 1815.6899 1833.0800 1872.1801 1851.9600 1845.0400 1865.0900 1888.7700 1890.9000 1885.5200 1872.3400 1857.6200 1849.0400 1852.5601 1865.6200 1857.4399 1866.5200 1872.0100 1860.7700 1872.2500 1858.8300 1841.1300 1846.3400 1868.2000 1867.6300 1877.1700 1878.0400 3/6/2014 3/5/2014 3/4/2014 3/3/2014 2/28/2014 2/27/2014 2/26/2014 2/25/2014 2/24/2014 2/21/2014 2/20/2014 2/19/2014 2/18/2014 2/14/2014 2/13/2014 2/12/2014 2/11/2014 2/10/2014 2/7/2014 2/6/2014 2/5/2014 2/4/2014 2/3/2014 1/31/2014 1/30/2014 1877.0300 1873.8101 1873.9100 1845.7300 1859.4500 1854.2900 1845.1600 1845.1200 1847.6100 1836.2500 1839.7800 1828.7500 1840.7600 1838.6300 1829.8300 1819.2600 1819.7500 1799.8400 1797.0200 1773.4301 1751.6400 1755.2000 1741.8900 1782.5900 1794.1899 Name 5.65% Senior Notes Due 2020 5.75% Senior Notes Due 2018 6.375% Senior Notes Due 2036 6.9% Notes Due 2026 7.125% Debentures Due 2023 7.4% Debentures Due 2037 7.625% Notes Due 2097 7.65% Debentures Due 2016 7.95% Debentures Due 2017 8.125% Senior Notes Due 2019 2013 Term Loan Facility Outstanding Par Value Amount (Mil) 400.00 300.00 400.00 2.00 10.00 326.00 500.00 78.00 220.00 400.00 2,194.00 ### 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Number Bonds 4000000 3000000 4000000 20000 100000 3260000 5000000 780000 2200000 4000000 Coupon Rate (%) 5.650% 5.750% 6.375% 6.900% 7.125% 7.400% 7.625% 7.650% 7.950% 8.125% 4.750% Current Market Price 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 YTM (%) 5.65% 5.75% 6.38% 6.90% 7.13% 7.40% 7.63% 7.65% 7.95% 8.13% 4.75% Outstanding Market Value (Mill) 400.00 300.00 400.00 2.00 10.00 326.00 500.00 78.00 220.00 400.00 2194.00 4830.00 Weight Weighted YTM (%) 8.28% 6.21% 8.28% 0.04% 0.21% 6.75% 10.35% 1.61% 4.55% 8.28% 45.42% 0.47% 0.36% 0.53% 0.00% 0.01% 0.50% 0.79% 0.12% 0.36% 0.67% 2.16% 100.00% 5.98% Market Return Risk Free Rate Market Risk Premium 8.14% 2.45% 5.69% Beta (As per Yahoo Finance) Equity Risk Premium 0.86 4.89% Cost of Equity 7.34% WACC Calculation of J.C. Penny Sources of Funds Equity Debt WACC Market Value (in Million) 2282.01 4668.00 Weight 32.83% 67.17% Cost of Fund 7.34% 5.98% Tax Rate 35.00% After Tax Cost of Fund 7.34% 3.88% Weighted Average Cost 2.41% 2.61% 5.02% Market Value of Debt Total Debt (In million) Less: Unamortized debt issuance costs (In Million) Less: Current Maturities (In million) Total long-term debt (In million) 4,830.00 61.00 101.00 4668.00 Market Value of Equity Per Share Value at Reporting Date Share Outstanding at Reporting Date Total Value of Equity (In million) 7.46 305.90 2282.01