Using the IRR - NPV Cash Flow tab in the work book, do a 3 year cash flow model using the data below.Then report the NPV, IRR and payback period.Also you should know how much cash is in the bank at the end of the project.

The numbers in the model now are all messed up, so change them and it will calculate the results.Remember, don't change the yellow cells as they contain formulas.I hope you enjoy playing with this

Beginning Cash is $5000.Discount rate:20%Tax Rate is 21%

Investment: $36,000(negative)

Depreciation is straight line for 3 yearsFixed cost is $12,000 per year

The sales price is $11 and the Unit Cost is $4/unit for all three years.

Year 1 you sell 6000, year 2, 5500 and in Year 3, 3500.

THE ANSWER FOR THIS FIRST PART IS: The NPV is$9,311.23/IRR is38.078%

Cash in bank is31,070/Payback Period is1.42yrs

I'M LOOKING FOR HELP ON THIS: Here is a hint.The cash in the bank after three years is $31,070.If you get something different, go back and try again.

Which of the numbers I gave you for this model are estimates and might be incorrect by the time the product is introduced to the market?

What happens if you change the price to $10 instead of $11.Is it still a good project?Change the unit cost to $5.50 in year 2 and $6 in year 3 and see what happens.Would you still do the project?How about the fixed cost going up by $2500 in years 2 and 3.Still good?After doing each of the changes above, put it back to the original before making the next change.

Is what you have been doing above a scenario or sensitivity analysis?