(Marking Criteria - Includes a capital budgeting problem, where, as a financial analysis, you will need to advise which alternative investment proposal the firm should accept. In doing so you will need to address some questions as listed below the problem. Your answers to the questions should be clear, focused and self-explanatory; where necessary you must show detailed workings/computations to support your answer.)

Problem (Capital Budgeting)

Contact Manufacturing Ltd is considering two alternative investment proposals. The first proposal calls for a major renovation of the company's manufacturing facility. The second involves replacing just a few obsolete pieces of equipment in the facility. The company will choose one project or the other this year, but it will not do both. The cash flows associated with each project appear below and the firm discounts project cash flows at 15%.

Year Renovate Replace

0 -$9,000,000 -$2,400,000

1 3,000,000 2,000,000

2 3,000,000 800,000

3 3,000,000 200,000

4 3,000,000 200,000

5 3,000,000 200,000

Assignment

a. Calculate the internal rate of return (IRR) of each project and based on this criterion, indicate which project you would recommend for acceptance

Please help me to solve questions 1 and 2 using the financial calculator (cash flow worksheet), no excel please