using excel

The directors of Wazi Ltd are considering a planned investment project costing $25m, payable at the start of the first year of operation. The following information relates to the investment project: This information needs adjusting to take account of selling price inflation of 4% per year and variable cost inflation of 3% per year. The fixed costs, which are incremental and related to the investment project, are in nominal terms. The year 4 sales volume is expected to continue for the foreseeable future. Wazi Ltd pays corporation tax of 25% one year in arrears. The company can claim tax-allowable depreciation on a 25% reducing balance basis. The views of the directors of Wazi Ltd are that all investment projects must be evaluated over four years of operations, with an assumed terminal value at the end of the fourth year of 5% of the initial investment cost. The real after-tax cost of capital of Wazi Ltd is 7% and its nominal after-tax cost of capital is 12%. (a) Calculate the net present value of the planned investment project. (4 Marks) (b) Graphically generate the internal rate of return of the project (2 Marks) (c) Using Scenario Manager find the net present value at the following investment project cost: Investment Project Cost: $15m;$20m,$28m and \$30m. (2 Marks) (d) Using Solver find the internal rate of return of the project (2 Marks)