I have an income statement, blance sheet and cash flow. I am calculating a mock strategy and have to compare what the next 3 years would like with and without my strategy through the financial statements. After that I have to use that info to calculate NPV per the directions below. I don't understand this, can you help me figure out what I need to use from the financials to calculate NPV and what my discount rate should be. And also how I should set it up in excel to calculate for me with this information.

Net Present Value analysis of proposed strategy's new cash flow - you may also use Excel to solve for this. From the income statement the change in operating income between your with and without strategy should serve as your cash inflow for each year. NOTE: To construct the first cash flow (cf1) the new revenue from your strategy(s) must be discounted back to the present value by calculating EBIT (Operating Income on the Income Statement) and that figure will be your cfn for each year. cf0 (initial cost of your strategy), cf1 (discounted cash flow first year), r (opportunity cost of capital, the rate of the next best alternative use of cash/debt/equity resources). a. = -0 + 1/(1 + ) ^1 + 2/(1 + )^ 2 + 3/(1 + )^ 3... /(1 + )^