Please show excel formulas for how you solved (ex: D13*C14)

PRoticm 3-12 Conocophilups GAs Acouismon Phouecr 19 ConocoPhillips's (COP) Natural Gas and Gas Products Department (NG\&GP) manages all of the company's activities relating to the gathering, purchasing, processing. and sale of natural gas and gas liquids, Chris Simpkins, a recent graduste, was fecently hired as a financial analyst to support the NG\&GP department. One of Chris's first assignments was to review the projections for a proposed gas purchase project that were made by one of the firm's field engineers. The cash flow projections for the tenyear project are found in Exhibit P3-12.1 and are based on the following assumptions and projections: I The investment required for the project consists of two components: First, there is the cost to lay the natural gas pipeline of $1,200,000. The project is expected to have a ten-year life and is depreciated over seven years using a seven-year modified accelerafed cost recovery system (MACRS), $ Second, the project will require a $145,000 increase in net working capital that is assumed to be recovered at the termination of the project. a The well is expected to produce 900,000 cubic feet (900MCF) per dxy of natural gas during year 1 and then decline over the remaining nine-year period ( 365 operating days per year). The natural gas production is expected to decline at a rate of 20% per year after year 1. * In addition to the initial expenditures for the pipeline and additional working capital, two more sets of expenses will be incurred. First, a fee consisting of 50% of the wellhead natural gas market price must be paid to the producer. In other words, if the wellhead market price is $6.00 per MCF, 50% (or 53.00 per MCF) is paid to the producer. Second, gas processing and eompression costs of $0.65 per MCF will be incurred. 4. There is no salvage value for the equipment at the end of the natural gas lease. A The natural gas price at the wellhead is currently $6.00 per MCF. a The cost of capital for this project is 15%. ANSWER THE FOLLOWING OUESTIONS. a. What are the NPV and IRR for the proposed project, based on the forccasts made above? Should Chris recommend that the project be undertaken? Explain your answer. What reservations, if any, should Chris have about recommending the project to his boss? b. Perform a sensitivity analysis of the proposed project to determine the impact on NPV and IRR for each of the following scenarios: 1. Best case: a natural gas price of $8.00 and a year 1 production rate of 1,200 MCF per day that declines by 20% per year after that. 2. Most likely casc: a natural gas price of $600 and a ycar I production rate of 900MCF per day that declines by 20% per year after that. 3. Wont case a natural gas price of 5300 and a year 1 production rate of 700 MCF per day that declines by 20% per year after that. c. Do breakeven sencitivity analysis to find each of the following: 1. Breakeves natural gas price for an NPV =0 2. Breakeven natural gas volume in year 1 for an NPV =0 3. Breakeven investment for an NPV =0 d. Given the results of your risk analysis in parts b and c, would you recommend this project? Explain your answer. Less Taxes (40\%) Not operating profit affer tax (NOPAT) Plus Doprociation expense Return of net working captal Propect Free Cash Flow NPV IRR \begin{tabular}{|c|c|c|c|c|} \hline & \multicolumn{2}{|c|}{ 2a-c. Scenario Summary } & \multicolumn{2}{|l|}{ Most Likely } \\ \hline & Current Values & Best Case & Case & Worst Case \\ \hline NG Price & & & & \\ \hline Production Rate & 900 & 1200 & 900 & 700 \\ \hline NPV & & & & \\ \hline \begin{tabular}{l} NNPV \\ IRR \end{tabular} & & & & \\ \hline \end{tabular} IRR Notes: Current Values column represents values of changing cells at fime Scenario Summary Report was crouted. 3. Breakevon Sonsitivity Analsyis Students should use Goal Seck in Excel to answer this question. a. Breakevon nautral gas price for an NPV =0 b. Breakeven natural gas volume in Year 1 for an NPV =0 c. Breakeven imvestment for an NPV =0