Question: Below, I am including the projected cash flows for a long-term capital project. The project has the following cash flows (negative numbers represent cash outflows
Below, I am including the projected cash flows for a long-term capital project. The
project has the following cash flows (negative numbers represent cash outflows and
positive numbers represent cash inflows):
YR 0 = -$50 Million!
YR 1 = $7 Million!
YR 2 = $7 Million!
YR 3 = $7 Million!
YR 4 = $7 Million!
YR 5 = $10 Million!
YR 6 = $10 Million!
YR 7 = $10 Million!
YR 8 = $12 Million!
YR 9 = $12 Million!
YR 10 = $12 Million plus the company stops the projects and sells off the project for an additional $16 Million inflow. Thus, total inflows at year ten equals $28 Million.
The company wishes to earn 12% on this project.
Compute the NPV and IRR for the above project. You can turn in an excel sheet for this
assignment. As an alternative, you can turn in a word file (if you turn in a word file
show your work). Regardless, this assignment only requires you to turn in one file
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