Questions:

1. A financial analyst was asked to conduct a feasibility analysis of the project to build a mushroom cannery. For this reason, he estimates the cash flows over the economic life of the project. The estimated cash flows are presented in the following table (all figures are in millions of rupiah).

	0 year	1st year	2nd year	3rd year	4th year
cash flow	- 1,200	- 200	+ 800	+ 900	+ 1,000

The analyst wants to apply the CAPM in the analysis of the project. To that end, he estimates the beta of the food industry and comes to the conclusion that equity = 1.58. He also observed that the average company in the industry used debt 60% of its assets. The risk-free rate of return is used at 10%, and the market portfolio profit rate is estimated at 18%. The tax rate is 35%.

Calculate:

a) What is the appropriate level of profit for the project if it is financed 100% by own capital?

b) What is the NPV of the project?

Notes: please provide answer with Ms. Excel