must be done on excel

PROBLEM 3: Down under Inc. Given the following data for a capital budgeting project: Down under Inc. is considering a new three-year project. The project requires an initial investment of $9 million and an additional working capital investment of $2 million (at time o'). The project is estimated to produce 4 million hats per year each year that can be sold for $5.00/hat . It has variable costs of $2.00/unit each year and fixed cost of $2 million per year The tax rate is 30% and the discount rate (WACC) is 15%. Use straight line depreciation. The project has no salvage value. Working capital is recovered at the end of the project. (a) Calculate the NPV of the project. (b) Generate three possible scenarios and a summary sheet using the Scenario Manager" in Excel using the following data: Base Case Optimistic Case Pessimistic case Initial Investment $9 million $9 million $9 million Working capital $2 million $2 million $2 million # Units sold /Year 4 million 5million 3 million Price per unit $5 $4 Variable cost/unit $2/unit $1/Unit $3/unit Fixed cost/year $2.0 million $2.0 million $2.0 million Tax rate 30% 30% 30% Discount rate (WACC) 15% 15% 15% $6 PROBLEM 3: Down under Inc. Given the following data for a capital budgeting project: Down under Inc. is considering a new three-year project. The project requires an initial investment of $9 million and an additional working capital investment of $2 million (at time o'). The project is estimated to produce 4 million hats per year each year that can be sold for $5.00/hat . It has variable costs of $2.00/unit each year and fixed cost of $2 million per year The tax rate is 30% and the discount rate (WACC) is 15%. Use straight line depreciation. The project has no salvage value. Working capital is recovered at the end of the project. (a) Calculate the NPV of the project. (b) Generate three possible scenarios and a summary sheet using the Scenario Manager" in Excel using the following data: Base Case Optimistic Case Pessimistic case Initial Investment $9 million $9 million $9 million Working capital $2 million $2 million $2 million # Units sold /Year 4 million 5million 3 million Price per unit $5 $4 Variable cost/unit $2/unit $1/Unit $3/unit Fixed cost/year $2.0 million $2.0 million $2.0 million Tax rate 30% 30% 30% Discount rate (WACC) 15% 15% 15% $6