uiz 1 EC

ABC Corporation is investing $500 million in production facilities. The present value of all future cash flows is estimated to be $700 million. Assume that all cash flows are after- tax. ABC has 180 million outstanding shares with a current market price of $25 per share. Assume that this investment is new information, and is independent of other expectations about the company.

1. What is the NPV of the new project?
2. What is the market value of the company without the new project?
3. What should be the effect of the project on the value of the company? That is, calculate the new market value of the company with the new project.
4. What should be the effect of the project on the stock price? That is, calculate the new stock price.

Hint: Market value of the company is same as market capitalization and is calculated as: Market capitalization = shares outstanding * market price

****I need this done in an excel document