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Your firm is considering two projects with the following cash flows. WACC 6% 6% year Project A Project B 0 -55,000 -70,000 1 10,000 10,000
Your firm is considering two projects with the following cash flows. | |||
WACC | 6% | 6% | |
year | Project A | Project B | |
0 | -55,000 | -70,000 | |
1 | 10,000 | 10,000 | |
2 | 9,000 | 10,000 | |
3 | 8,000 | 10,000 | |
4 | 7,500 | 10,000 | |
5 | 7,500 | 10,000 | |
6 | 7,500 | 10,000 | |
7 | 7,500 | 10,000 | |
8 | 7,500 | 12,000 | |
a. Calculate NPV and IRR for both projects | |||
NPV | |||
IRR | |||
b. Do the following 2 questions (b-1 and b-2) on sheet 3 and change the name from Sheet 3 to "Datatable NPV IRR" | |||
b-1. Calculate various of NPV with "date table" for project A and Project B respectively. Use the following information: WACC: 1%, 2%, 3%, 4%, 5%, 6%, and 7%,The initial invest of project A: 35,000, 45,000, 55,000, 65,000, 75,000, 85,000. The initial investment of project B: 40,000, 50,000, 60,000, 70,000, 80,000, 90,000 . (To help you, I have create a template in Sheet 3) | |||
b-2 Use the above information of initial investment to create data tables of IRRs for Project A and project B respectively. |
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