Year Cash Flow 10.1 0 -40000 1. Create 2 colums entitled Year, and Cash Flow. 1 9000 2.List 1-7 years in column 1, and 9000 for each year in column 2. 2 9000 3.List the NPV formula, as =npv(rate in decimals, b3:b9 or all the cash flows)-initial costs 3 9000 4.You should get 2409.77, if not inform me. 4 9000 5 9000 6 9000 7 9000 $2,409.77 10.2 10.2 Year Cash Flow 1.See problem 1. We are using the same table. 0 -40000 2.Apply the IRR formula, = IRR(b13:b20), or the list of cash flows) 1 9000 3. You should get 12.84%, if not, contact me. 2 9000 3 9000 4 9000 5 9000 6 9000 7 9000 12.84% 10.3 10.3 11.93% 1.Apply the MIRR formula to the cash flows in 10.2. =mirr(b13:b20, rate in decimals, rate in decimals) 10.15 2. You should get 11.93%, if not contact me. Year Cash flow Plan A 10.15 0 -50000000 1.There are 2 Plans, A and B. Use the procedure in 10.1 to obtain NPV for both plans. 1 8000000 2.Use the procedure in 10.2 to obtain Irr for both plans. 2 8000000 3.NPV for Plan A = $ 18,108509.76, NPV for Plan B = $ 13,946116.65. If you do not obtain these values, inform me. 3 8000000 4.IRR for Plan A = 15.03%, IRR for Plan B = 22.26%. If you do not obtain these values, inform me. 4 8000000 5 8000000 6 8000000 7 8000000 8 8000000 9 8000000 10 8000000 11 8000000 12 8000000 13 8000000 14 8000000 15 8000000 16 8000000 17 8000000 18 8000000 19 8000000 20 8000000 $18,108,509.76 npv Year Cash flow B 0 -50000000 1 3400000 2 3400000 3 3400000 4 3400000 5 3400000 6 3400000 7 3400000 8 3400000 9 3400000 10 3400000 11 3400000 12 3400000 13 3400000 14 3400000 15 3400000 16 3400000 17 3400000 18 3400000 19 3400000 20 3400000 $13,946,116.65 a. IRR Year Cash flow Plan A 0 -50000000 1 8000000 2 8000000 3 8000000 4 8000000 5 8000000 6 8000000 7 8000000 8 8000000 9 8000000 10 8000000 11 8000000 12 8000000 13 8000000 14 8000000 15 8000000 16 8000000 17 8000000 18 8000000 19 8000000 20 8000000 15.03% Year Cash flow Plan B 0 -15000000 1 3400000 2 3400000 3 3400000 4 3400000 5 3400000 6 3400000 7 3400000 8 3400000 9 3400000 10 3400000 11 3400000 12 3400000 13 3400000 14 3400000 15 3400000 16 3400000 17 3400000 18 3400000 19 3400000 20 3400000 22.26% 10.16. Plane A NPV $8.14 10.16 There are 2 planes. Use the Equivalent Annual Annuity as the basis of comparison, as the planes have different lives. Equivalent Annual Annuity $2.26 millions Plane A 1.Compute the NPV Plane B =-PV(rate in decimals, number of periods, payment, 0) - initial costs NPV $9.26 millions You should get an npV of 8.14. Equivalent Annual Annuity $1.64 millions 2.Compute the Equivalent Annual Annuity, as the annual payment to achieve the net present value. =PMT(rate in decimals, number of periods, payment,0) - nitial costs You should get an equivalent annual annuity of 2.26 millions. 3.Repeat for Plane B. You should get an equivalent annual annuity of $ 1.64 millions