Question: I need Answer from Q: 5 to Q: 10. You can see previous answer from: http://www.chegg.com/homework-help/questions-and-answers/-q10127841 NPV and IRR Calculate (and a computer is allowed
I need Answer from Q: 5 to Q: 10.
You can see previous answer from: http://www.chegg.com/homework-help/questions-and-answers/-q10127841

NPV and IRR Calculate (and a computer is allowed provided your working are exposed) the net present value (NPV), of the following project, which involves construction expenditure over three years of: Year 1 pound 22 million Year 2 pound 37 million year 3 pound 34 million, including commissioning, then decommissioning costs are incurred in Year 14 pound 15 million & it operates, from construction completion, to produce revenues over 10 years as follows: Year 4 pound 5 million Year 5 7 million Year 6-12 pound 17 million (pa) year 13 pound 9 million Note: these revenues derive from the sale of 'widgets' produced. The sale price per widget is 100 today. Set up an excel spreadsheet and calculate: the project's NPV (to the nearest pound 0. 1 million), assuming a discount rate of 10% then...using the same data: Show the project's IRR prove that the NPV is zero at this Project IRR Draw a cumulative cash flow graph (chart) What is the payback period? What is the maximum capital locked up? What unit sales price is required to produce an IRR equivalent to the discount rate? (use your own calculation, or excel's go a sleek provided you show which parameters were used) What is the NPV is there are no decommissioning costs? Separately, what is the NPV if there is inflation of 0.6% pa(starting in year4) which can be recouped via the sales price? Finally, and very importantly, comment on the project's attractiveness, with your reasoning
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
