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Write =IF() statements to give your decision to accept or reject the project under each criteria and give the Final overall decision under each scenario
- Write =IF() statements to give your decision to accept or reject the project under each criteria and give the Final overall decision under each scenario (of WACC) considering all above six options
- calculate the crossover rate for the two NPV profiles
- Calculate the NPV profiles for the two alternatives by assuming a range of WACC starting with 0% and going up to 25% (increments of 5%)
- Make one graph of these two NPV profiles. Label your graph with a title, X and Y axis, IRR, and cross over rate (clearly marked and shown) If you cannot complete all bullets that is okay! Thank you in advance. Please see info below for reference.
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Year Cash Flows Alternative 1 Alternative 2 0 ($50,000) ($400,000) 1 $15,500 $51,300 2 $20,100 $155,000 3 $18,900 $127,800 4 $17,100 $126,900 5 $13,700 $125,100
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At 10% WACC Alternative 1 Alternative 2 Payback Period 2.76190 3.51931 Discounted Payback Period 3.43646 4.54806 NPV $15,088.48 $35,105.23 IRR 21.44% 13.10% MIRR 15.96% 11.87% Profitability Index $1.30 $1.09 At 13% WACC Alternative 1 Alternative 2 Payback Period 2.76190 3.51931 Discounted Payback Period 3.70971 4.98399 NPV $10,480.27 $1,087.19 IRR 21.44% 13.10% MIRR 17.38% 13.06% Profitability Index $1.21 $1.00 At 15% WACC Alternative 1 Alternative 2 Payback Period 2.76190 3.51931 Discounted Payback Period 3.90991 5.31201 NPV $7,692.11 ($19,406.16) IRR 21.44% 13.10% MIRR 18.34% 13.86% Profitability Index $ 1.15 $0.95
| Year | Cash Flows | |
| Alternative 1 | Alternative 2 | |
| 0 | ($50,000) | ($400,000) |
| 1 | $15,500 | $51,300 |
| 2 | $20,100 | $155,000 |
| 3 | $18,900 | $127,800 |
| 4 | $17,100 | $126,900 |
| 5 | $13,700 | $125,100 |
| At 10% WACC | ||
| Alternative 1 | Alternative 2 | |
| Payback Period | 2.76190 | 3.51931 |
| Discounted Payback Period | 3.43646 | 4.54806 |
| NPV | $15,088.48 | $35,105.23 |
| IRR | 21.44% | 13.10% |
| MIRR | 15.96% | 11.87% |
| Profitability Index | $1.30 | $1.09 |
| At 13% WACC | ||
| Alternative 1 | Alternative 2 | |
| Payback Period | 2.76190 | 3.51931 |
| Discounted Payback Period | 3.70971 | 4.98399 |
| NPV | $10,480.27 | $1,087.19 |
| IRR | 21.44% | 13.10% |
| MIRR | 17.38% | 13.06% |
| Profitability Index | $1.21 | $1.00 |
| At 15% WACC | ||
| Alternative 1 | Alternative 2 | |
| Payback Period | 2.76190 | 3.51931 |
| Discounted Payback Period | 3.90991 | 5.31201 |
| NPV | $7,692.11 | ($19,406.16) |
| IRR | 21.44% | 13.10% |
| MIRR | 18.34% | 13.86% |
| Profitability Index | $ 1.15 | $0.95 |
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Statistics Informed Decisions Using Data
Authors: Michael Sullivan
5th Global Edition
9781292157115
