Assignment Learning Objectives:

(a) Develop a proforma project income statement using an Excel spreadsheet

(b) Compute net project cash flows, NPV, IRR and Payback period

(c) Perform sensitivity and scenario analyses

(d) Develop problem-solving and critical thinking skills

Assignment Instructions:

this assignment, which combines using Excel to perform calculations The use of formulas and cell references (rather than hard typing in numbers) should be used in all cases where they can. To guide you, the cells shaded gray are where formulas, numerical inputs or calcuations are needed in order to complete the assignment.

PART 3A: Use the Excel cells from Part 1A above to run a sensitivity analysis on revenue growth. Recall from above the high case has 8% revenue growth, base case is 5% and low case is 2%. Edit your Part 1A spreadsheet to account for these different growth rates and observe the changes to NPV, IRR and Payback period. Record the results in the table below. When you are done, put your Part 1A spreadsheet back to Base Case before you submit your assignment.

Sensitivity Analysis Table

Growth (%)

NPV ($'s)

IRR (%)

Payback

Low Growth

2%

Base Case (from part 1A)

5%

High Growth

8%