Please provide all the calculations in excel:

• 1.The iniital investment is $1,500. NPC has the opportunity to invest in a project that has a 75% chance of generating $500 per year for 7-years under good conditions or a 25% chance of generating $25 per year for 7-years. Assuming that all cash flows are discounted at 10%, calculate the effect of waiting on the project's risk, using the same data. By how much will delaying reduce the project's coefficient of variation? (Hint: Use the expected NPV.)

• 2.Initial investment is $1,500. NPC has the opportunity to invest in a project that has a 75% chance of generating $500 per year for 7-years under good conditions or a 25% chance of generating $25 per year for 7-years. Assuming that all cash flows are discounted at 10%, if NPC chooses to wait a year before proceeding, how much will this increase or decrease the project's expected NPV in today's dollars (i.e., at t = 0), relative to the NPV if it proceeds today?

• 3.Holland Auto Parts is considering a merger with Workman Car Parts. Workman's market-determined beta is 0.9, and the firm currently is financed with 20% debt, at an interest rate of 8%, and its tax rate is 25%. If Holland acquires Workman, it will increase the debt to 60%, at an interest rate of 9%, and the tax rate will increase to 35%. The risk-free rate is 6% and the market risk premium is 4%. What will Workman's required rate of return on equity be after it is acquired?

• 4. Juicers Inc. is thinking of acquiring Fast Fruit Company. Juicers expects Fast Fruit's NOPAT to be $9 million the first year, with no net new investment in operating capital and no interest expense. For the second year, Fast Fruit is expected to have NOPAT of $25 million and interest expense of $5 million. Also, in the second year only, Fast Fruit will need $10 million of net new investment in operating capital. Fast Fruit's marginal tax rate is 40%. After the second year, the free cash flows and the tax shields from Fast Fruit to Juicers will both grow at a constant rate of 4%. Juicers has determined that Fast Fruit's cost of equity is 17.5%, and Fast Fruit currently has no debt outstanding. Assume that all cash flows occur at the end of the year, Juicers must pay $45 million to acquire Fast Fruit. What it the NPV of the proposed acquisition? Note that you must first calculate the value to Juicers of Fast Fruit's equity.

5. Calculate the project's coefficient of variation. (Hint: Use the expected NPV.)

Squared dev.

Prob. NPV NPVi - E(NPV) Squared deviation times probability

0.24 $6,289.81 $5,829 $ $

0.24 -$2,390.74 -$2,852 $ $

0.32 -$1,233.33 -$1,694 $ $

0.20 -$ 400.00 -$861 $ $ ____________

1.00 $ 461.11 Variance $_____________

Standard deviation $