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 (RTN), 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 $3.7 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 aftertax value of the land will be $4.9 million. 3. The plant and equipment will cost $21 million to build. 4. The manufacturing plant has an eight-year tax life, and RTN uses straight-line depreciation. At the end of the project, the plant and equipment can be scrapped for $3.7 million. 5. The project requires $1,100,000 in initial net working capital investment to get operational 6. The plan is to manufacture 13,000 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%, 12%, and 10%. We will continue to sell them at $10,400 each year. 7. The company will incur $6,000,000 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 4%, 5%, 2%, and 2%. 8. RTN's tax rate is 35 percent. 9. The following market data on RTN's securities is current: Debt: 222,000, 7.2 percent coupon bonds are outstanding, 25 years to maturity, selling for 108 percent of par; the bonds have a $1,000 par value each and make semiannual payments. Common: 8,000,000 shares outstanding, selling for $181.30 per share; you have stock prices and S&P 500 index value for the past five years. Preferred: 442,000 shares of 5 percent preferred stock outstanding, selling for $80.20 per share and having a par value of $100. Market: 9 percent expected market risk premium; 3 percent risk-free rate. You will need to estimate RTN's beta using the data in the data file. To do so, you need to Date RIN S&P 8/1/2014 86.67 2003.37 9/1/2014 91.42| 1972.29004 10/1/2014 94.014 2018.05005 11/1/2014 96.566 2067.56006 12/1/2014 97.896 2058.8999 1/1/2015| 90.548] 1994.98999 2/1/2015| 98.991 2104.5 3/1/2015 99.428 2067.88989 4/1/2015 95.23 2085.51001 5/1/2015| 94.552] 2107.38989 6/1/2015| 87.612] 2063.11011 7/1/2015 100.58 2103.84009 8/1/2015 96.91 1972.18005 9/1/2015 100.74 1920.03003 10/1/2015 108.24 2079.36011 11/1/2015 115.07 2080.40991 12/1/2015 115.53 2043.93994 1/1/2016 118.98 1940.23999 2/1/2016 115.52] 1932.22998 3/1/2016 114.39| 2059.73999 4/1/2016) 117.86 2065.30005 5/1/2016| 121.68 2096.94995 6/1/2016 127.57 2098.86011 7/1/2016 130.93 2173.6001 8/1/2016 132.2 2170.94995 9/1/2016| 128.43 2168.27002 10/1/2016| 128.88 2126. 1499 11/1/2016| 141.85 2198.81006 12/1/2016| 138.77 2238.83008 1/1/2017 137.45 2278.87012 2/1/2017| 146.97 2363.63989 3/1/2017 145.4 2362.71997 4/1/2017 147.98 2384.19995 5/1/2017 157.19 2411.80005 6/1/2017 154.77 2423.40991 7/1/2017| 165.45 2470.30005 8/1/2017| 175.32 2471.6499 9/1/2017 179.72] 2519.36011 Date RTN S&P 10/1/2017 173.57 2575.3 11/1/2017| 184.91 2584.8 12/1/2017 181.71 2673.6 1/1/2018 202.11 2823.8 2/1/2018 211.3 2713.8 3/1/2018 209.66| 2640.9 4/1/2018) 199.09 2648.1 5/1/2018] 204.34 2705.3 6/1/2018] 188.421 2718.4 7/1/2018) 193.15 2816.3 8/1/2018195.38 2901.5 9/1/2018 202.46 2914 10/1/2018 171.48 2711.7 11/1/2018 172.5 2760.2 12/1/2018 150.86 2506.9 1/1/2019 163.021 2704.1 2/1/2019 184.52 2784.5 3/1/2019 180.15| 2834.4 4/1/2019 175.71 2945.8 5/1/2019 173.55 2752.1 6/1/2019 172.94 2941.8 7/1/2019 181.3| 2980.4 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 (RTN), 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 $3.7 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 aftertax value of the land will be $4.9 million. 3. The plant and equipment will cost $21 million to build. 4. The manufacturing plant has an eight-year tax life, and RTN uses straight-line depreciation. At the end of the project, the plant and equipment can be scrapped for $3.7 million. 5. The project requires $1,100,000 in initial net working capital investment to get operational 6. The plan is to manufacture 13,000 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%, 12%, and 10%. We will continue to sell them at $10,400 each year. 7. The company will incur $6,000,000 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 4%, 5%, 2%, and 2%. 8. RTN's tax rate is 35 percent. 9. The following market data on RTN's securities is current: Debt: 222,000, 7.2 percent coupon bonds are outstanding, 25 years to maturity, selling for 108 percent of par; the bonds have a $1,000 par value each and make semiannual payments. Common: 8,000,000 shares outstanding, selling for $181.30 per share; you have stock prices and S&P 500 index value for the past five years. Preferred: 442,000 shares of 5 percent preferred stock outstanding, selling for $80.20 per share and having a par value of $100. Market: 9 percent expected market risk premium; 3 percent risk-free rate. You will need to estimate RTN's beta using the data in the data file. To do so, you need to Date RIN S&P 8/1/2014 86.67 2003.37 9/1/2014 91.42| 1972.29004 10/1/2014 94.014 2018.05005 11/1/2014 96.566 2067.56006 12/1/2014 97.896 2058.8999 1/1/2015| 90.548] 1994.98999 2/1/2015| 98.991 2104.5 3/1/2015 99.428 2067.88989 4/1/2015 95.23 2085.51001 5/1/2015| 94.552] 2107.38989 6/1/2015| 87.612] 2063.11011 7/1/2015 100.58 2103.84009 8/1/2015 96.91 1972.18005 9/1/2015 100.74 1920.03003 10/1/2015 108.24 2079.36011 11/1/2015 115.07 2080.40991 12/1/2015 115.53 2043.93994 1/1/2016 118.98 1940.23999 2/1/2016 115.52] 1932.22998 3/1/2016 114.39| 2059.73999 4/1/2016) 117.86 2065.30005 5/1/2016| 121.68 2096.94995 6/1/2016 127.57 2098.86011 7/1/2016 130.93 2173.6001 8/1/2016 132.2 2170.94995 9/1/2016| 128.43 2168.27002 10/1/2016| 128.88 2126. 1499 11/1/2016| 141.85 2198.81006 12/1/2016| 138.77 2238.83008 1/1/2017 137.45 2278.87012 2/1/2017| 146.97 2363.63989 3/1/2017 145.4 2362.71997 4/1/2017 147.98 2384.19995 5/1/2017 157.19 2411.80005 6/1/2017 154.77 2423.40991 7/1/2017| 165.45 2470.30005 8/1/2017| 175.32 2471.6499 9/1/2017 179.72] 2519.36011 Date RTN S&P 10/1/2017 173.57 2575.3 11/1/2017| 184.91 2584.8 12/1/2017 181.71 2673.6 1/1/2018 202.11 2823.8 2/1/2018 211.3 2713.8 3/1/2018 209.66| 2640.9 4/1/2018) 199.09 2648.1 5/1/2018] 204.34 2705.3 6/1/2018] 188.421 2718.4 7/1/2018) 193.15 2816.3 8/1/2018195.38 2901.5 9/1/2018 202.46 2914 10/1/2018 171.48 2711.7 11/1/2018 172.5 2760.2 12/1/2018 150.86 2506.9 1/1/2019 163.021 2704.1 2/1/2019 184.52 2784.5 3/1/2019 180.15| 2834.4 4/1/2019 175.71 2945.8 5/1/2019 173.55 2752.1 6/1/2019 172.94 2941.8 7/1/2019 181.3| 2980.4