You need the excel spreadsheet provided that has raw data for Raytheon Company and the Standard & Poors 500 Index. Suppose you have been hired as a financial consultant to Raytheon Company (RTX), a large, publicly traded firm that is the market share leader in radar detection systems (RDS). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. You need to advise them whether to take the project or not. Calculate the Payback Period. NPV, and IRR for the project and determine whether they should take the project or not. 1. The company bought some land three years ago for $6 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. The land was appraised last week for $4.5 million. 2. In five years, the value of the land will be $4.9 million. 3. The plant and equipment will cost $19.37 million to build. 4. The manufacturing plant has a 30-year tax life, and RTX uses straight-line depreciation. At the end of the project, the plant and equipment can be scrapped for $10 million. 5. The project requires $4,000,000 in initial net working capital investment to get operational 6. The plan is to manufacture 15,000 RDSs in the first year and sell them at $10,400 per machine. The following 4 years, the number to be produced grows by 15%, 20%, 25%, and 25% annually, i.e. year over year. The price of the RDS will rise by 5% per year. 7. The company will incur $7,900,000 in annual fixed costs, and the variable production costs are $9.000 per RDS in the first year. The following 4 years, variable production costs will grow at a rate of 5%, 3%, 2%, and 2% annually, i.e. year over year. 8. RTX's tax rate is 21 percent. | 1 2 3 4 5 2 6 7 7 8 1/2016 9 0 1 1 2 3 4 5 6 7 7 8 9 20 21 1 22 3 24 25 26 27 28 +9 90 1 2 33 84 5 6 7 8 9 10 11 12 3 14 15 16 17 18 19 50 $1 2 3 64 5 * 66 87 58 $9 50 51 52 Date RTX 5/1/2016 56.0763 6/1/2016 57.5543 7/1/2016 60.4166 8/1/2016 59.7319 2.7319 9/1/2016 11/2010 57.368 200 10/1/2016 57.7068 11/1/2016 60.8236 11/1/2010 0.02 12/1/2016 62.2782 1/1/2017 62.3066 2/1/2017 63.9428 2014 3/1/2017 64.129 4/1/2017 68.0038 5/1/2017 69.3126 6/1/2017 70.1684 7/1/2017 68.1342 1. 8/1/2017 68.795 re 9/1/2017 67.1084 10/1/2017 69.2359 11/1/2017 70.213 11/1/2017 12/1/2017 74.1928 1/1/2018 80.2646 2/1/2018 78.3628 41/2010 10.020 3/1/2018 73.5816 2010 13.10 4/1/2018 70.2657 11:40 5/1/2018 72.9968 6/1/2018 73.5321 100 1.22 7/1/2018 79.8308 8/1/2018 77.4548 9/1/2018 82.6636 112040 10/1/2018 73.44 www.no 11/1/2018 72.0387 . 12/1/2018 63.3181 1/1/2019 70.2101 2/1/2019 74.7294 2048 22 3004 an 3/1/2019 77.0996 4/1/2019 85.3067 5/1/2019 75.5503 aan 1094 6/1/2019 78.3129 an 7/1/2019 80.3579 an 02 8/1/2019 78.3369 2040 en 40 9/1/2019 82.6027 10/1/2019 86.8744 an 11/1/2019 89.7544 12/1/2019 91.0649 1/1/2020 91.3325 2/1/2020 79.4082 21 - 3/1/2020 57.6325 4/1/2020 62.9192 20 5/1/2020 62.6377 a " 6/1/2020 60.3522 7/1/2020 55.5138 Tai 8/1/2020 59.7449 Tai 9/1/2020 56.7756 10/1/2020 53.5984 11/1/2020 70.7672 0.7072 12/1/2020 71.0727 1/1/2021 66.3219 2/1/2021 71.5497 3/1/2021 77.27 4/1/2021 82.81 S&P 2,096.95 2,098.86 2,173.60 2,170.95 2,168.27 2.126.15 10.12 2,198.81 2,238.83 2,278.87 2.363.64 . 2,362.72 02.12 2,384.20 2,411.80 2,423.41 . 2,470.30 . 2,471.65 2,519.36 2.575.26 3.co 2,647.58 So 2,673.61 2,823.81 12.04 2,713.83 2.640.87 S. 2,648.05 2,705.27 2,718.37 10. 2,816.29 2,901.52 2,913.98 2,711.74 12 2,760.17 2,506.85 2,704.10 2,784.49 2,834.40 2,945.83 2,752.06 2,941.76 500 2,980.38 2,926.46 2,976.74 2012 3,037.56 3,140.98 3,230.78 3,225.52 22 2,954.22 Tones 2,584.59 2,912.43 3,044.31 3,100.29 3,271.12 3,500.31 ca 3,363.00 3,269.96 10 3,621.63 2.0 3,756.07 3,714.24 3,811.15 3,972.89 4,186.72 You need the excel spreadsheet provided that has raw data for Raytheon Company and the Standard & Poors 500 Index. Suppose you have been hired as a financial consultant to Raytheon Company (RTX), a large, publicly traded firm that is the market share leader in radar detection systems (RDS). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. You need to advise them whether to take the project or not. Calculate the Payback Period. NPV, and IRR for the project and determine whether they should take the project or not. 1. The company bought some land three years ago for $6 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. The land was appraised last week for $4.5 million. 2. In five years, the value of the land will be $4.9 million. 3. The plant and equipment will cost $19.37 million to build. 4. The manufacturing plant has a 30-year tax life, and RTX uses straight-line depreciation. At the end of the project, the plant and equipment can be scrapped for $10 million. 5. The project requires $4,000,000 in initial net working capital investment to get operational 6. The plan is to manufacture 15,000 RDSs in the first year and sell them at $10,400 per machine. The following 4 years, the number to be produced grows by 15%, 20%, 25%, and 25% annually, i.e. year over year. The price of the RDS will rise by 5% per year. 7. The company will incur $7,900,000 in annual fixed costs, and the variable production costs are $9.000 per RDS in the first year. The following 4 years, variable production costs will grow at a rate of 5%, 3%, 2%, and 2% annually, i.e. year over year. 8. RTX's tax rate is 21 percent. | 1 2 3 4 5 2 6 7 7 8 1/2016 9 0 1 1 2 3 4 5 6 7 7 8 9 20 21 1 22 3 24 25 26 27 28 +9 90 1 2 33 84 5 6 7 8 9 10 11 12 3 14 15 16 17 18 19 50 $1 2 3 64 5 * 66 87 58 $9 50 51 52 Date RTX 5/1/2016 56.0763 6/1/2016 57.5543 7/1/2016 60.4166 8/1/2016 59.7319 2.7319 9/1/2016 11/2010 57.368 200 10/1/2016 57.7068 11/1/2016 60.8236 11/1/2010 0.02 12/1/2016 62.2782 1/1/2017 62.3066 2/1/2017 63.9428 2014 3/1/2017 64.129 4/1/2017 68.0038 5/1/2017 69.3126 6/1/2017 70.1684 7/1/2017 68.1342 1. 8/1/2017 68.795 re 9/1/2017 67.1084 10/1/2017 69.2359 11/1/2017 70.213 11/1/2017 12/1/2017 74.1928 1/1/2018 80.2646 2/1/2018 78.3628 41/2010 10.020 3/1/2018 73.5816 2010 13.10 4/1/2018 70.2657 11:40 5/1/2018 72.9968 6/1/2018 73.5321 100 1.22 7/1/2018 79.8308 8/1/2018 77.4548 9/1/2018 82.6636 112040 10/1/2018 73.44 www.no 11/1/2018 72.0387 . 12/1/2018 63.3181 1/1/2019 70.2101 2/1/2019 74.7294 2048 22 3004 an 3/1/2019 77.0996 4/1/2019 85.3067 5/1/2019 75.5503 aan 1094 6/1/2019 78.3129 an 7/1/2019 80.3579 an 02 8/1/2019 78.3369 2040 en 40 9/1/2019 82.6027 10/1/2019 86.8744 an 11/1/2019 89.7544 12/1/2019 91.0649 1/1/2020 91.3325 2/1/2020 79.4082 21 - 3/1/2020 57.6325 4/1/2020 62.9192 20 5/1/2020 62.6377 a " 6/1/2020 60.3522 7/1/2020 55.5138 Tai 8/1/2020 59.7449 Tai 9/1/2020 56.7756 10/1/2020 53.5984 11/1/2020 70.7672 0.7072 12/1/2020 71.0727 1/1/2021 66.3219 2/1/2021 71.5497 3/1/2021 77.27 4/1/2021 82.81 S&P 2,096.95 2,098.86 2,173.60 2,170.95 2,168.27 2.126.15 10.12 2,198.81 2,238.83 2,278.87 2.363.64 . 2,362.72 02.12 2,384.20 2,411.80 2,423.41 . 2,470.30 . 2,471.65 2,519.36 2.575.26 3.co 2,647.58 So 2,673.61 2,823.81 12.04 2,713.83 2.640.87 S. 2,648.05 2,705.27 2,718.37 10. 2,816.29 2,901.52 2,913.98 2,711.74 12 2,760.17 2,506.85 2,704.10 2,784.49 2,834.40 2,945.83 2,752.06 2,941.76 500 2,980.38 2,926.46 2,976.74 2012 3,037.56 3,140.98 3,230.78 3,225.52 22 2,954.22 Tones 2,584.59 2,912.43 3,044.31 3,100.29 3,271.12 3,500.31 ca 3,363.00 3,269.96 10 3,621.63 2.0 3,756.07 3,714.24 3,811.15 3,972.89 4,186.72