please show work in excel. Thanks
Prepare a report in the given excel sheet that answers the following questions. 1. What is the payback period (PBP) of the project? Based on your analysis of PBP, should the company accept the smart phone project if the required payback period is 3 years? Use "if" formula to construct "Accept" or "Reject" decision. (10 points) 2. What is the IRR of the project? Based on your analysis of IRR, should the company accept the project? Use "if" formula to construct "Accept" or "Reject" decision. (10 points) 3. What is the NPV of the project? Based on your analysis of NPV, should the company accept the project? Use "if" formula to construct "Accept" or "Reject" decision (10 points) 4. What is the Profitability Index (PI) of the project? Based on your analysis of PI, should the company accept the project? Use "f" formula to construct "Accept" or "Reject" decision. (5 points) 5. At what price would Nokia Inc, be indifferent to accepting the project? Use "if" formula to construct "Accept" or "Reject" decision. (10 points) 6. Draw the NPV profile for the Project. (10 points) B D E F G H Year 1 Year 2 Year 3 Year 4 Year 5 1 2 Units Sales 3 4 Equipment Cost 5 Salvage value 6 7 Units Price 8 Variable cost (per unit) 9 Fixed costs (per year) 10 11 Tax rate 12 NWC (% of sales) 13 Required return 14 Required Paybacke Period (years) 15 16 MACRS Schedule Year 5 Year 6 Year 7 Year 8 17 3-year 18 5-year 19 7-year Year 1 33.33% 20.00% 14.29% Year 2 44.4596 32.00% 244996 Year 3 14,81% 19.20% 17.4996 Year 4 7.4196 11.52% 12.49% 11.52% 8.93% 5.76% 8.92% 8.93% 4,46% 20 21 22 3 D H Year 0 E Year 3 Year 1 F Year 4 Year 2 G Year 5 26 Year 27 OCH 28 Change in NWC 29 Capital spending 30 Total cash flow 31 Cumulative cash flow 32 33 Question 1 34 Payback Period 35 Decision? 36 37 Question 2 38 NPV 39 Decision 40 41 Question 42 IRR 43 Decision? 44 45 Question 46 Profitability Index 47 Decision? 48 49 Questions so indifferent Sales Price 51 52 Questions 53 R 54 0.0094 55 5.00 56 10.00 57 15.000 58 20.00 59 25.00 GO 30.000 61 3500 62 40.00 63 64 5000 65 66 62 NPV Nokia Inc. has one smart phone model on the market, and sales have been excellent. The product is a unique item in the market that it comes in a variety of tropical colors. However, the technology changes rapidly, and the current smart phone has limited features in comparison with newer models. The company is planning for a new smartphone, which will include all the existing features and WiFi tethering in addition Nokia Inc. can manufacture the new smart phones for $365 each in variable costs. Fixed costs for the operation are estimated to run $6.9 million per year. The estimated sales volume is 180,000; 190,000; 150,000; 125,000; and 100,000 per year for the next five years, respectively. The unit price of the new smart phone will be $625. The necessary equipment can be purchased for $600 million and will be depreciated on a seven-year MACRS schedule. It is believed the value of the equipment in five years will be 56.8 million. The effective tax rate for the company is 35%. The project requies no initial NWC investment, and it requires NWC balance equal to 15% of sales with the timing of the cash flows for the year. For example, there is no initial outlay for NWC, but changes in NWC will first occur in Year! with the first year's sales. The required return for the project is 20%
