Q1. Below is the projected financial information provided by Altaf Hussain Manufacturing LLC. The company wants to introduce two new products into the market, Sally and Tally. The company provides the following forecasted information of sales and costs.

	Sales volume in units by year
Product/Year	1	2	3	4
Zandu	60,000	75,000	100,000	30,000
Fundu	75,000	129,000	125,000	42,000
Product	Zandu	Fundu
Direct material costs (RO)	13	12
Selling price (RO)	33	26
Selling price infation (per year)	2.5%
Direct material cost infation (per year)	3%
Advertisement cost (First Year)	500,000
Advertisement cost (2nd and 3rd Year)	200,000
Initial investment	2,000,000
Fixed costs	1,000,000
Tax	25%
Residual value	1.2million

Required:

Calculate NPV and IRR of this proposal/project using MS Excel.

Hint:

1. Calculate expected revenue

2. Expected costs

3. Expected cashflows

to calculate NPV and IRR.