Question
Using Microsoft Excel, appraise the following project on Sheet 1 and rename the sheet as Master Copy. Calculate NPV using the two methods and also
Using Microsoft Excel, appraise the following project on Sheet 1 and rename the sheet as Master Copy. Calculate NPV using the two methods and also calculate the IRR of the project. Copy and paste the appraised project on Sheet 2 and incorporate the conditions below to the project, naming them from Condition 1 to Condition 6. Using MS Word, give an explanation on each condition incorporated, stating the effect to the viability of the project. Heavy Duty Battery Manufacturing Project Plant Machinery USD265000.00 Bank interest rate 6.5% Operation Cost USD45000,00 increases yearly by 5% Machinery Operator Salary USD35000.00 increases yearly by 6% Scrap value USD75000.00 Selling price of each battery USD1500.00 Year Number of Units Year 1 110 Year 2 108 Year 3 103 Year 4 98 Year 5 86 Conditions to be incorporated into to the project. 1. The plant machinery comes with a tool box valued at USD15500.00 2. Apply a material cost of USD25000 which increases yearly by 2.5%. 3. Incorporate a government subsidy of USD20000 which has a yearly increase rate of 8%. 4. Apply a 10% discount on the value of the tool box. 5. What is effect of increasing the yearly production output by 1.5%? 6. The project team is considering employing an assistant machinery operator. Recommend the first-year salary and the yearly salary increase percentage rate applicable from year two. Simulate your suggested assistant machine operator salary and the percentage rate increase. Give an explanation showing the impact of this adjustment to the projects viability.
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