Net Present Value Analysis foriNew Facility

An organization is considering a new retall facility and is convinced the facility will be proftable due to

demographic data obtained and analyzed by the marketing team. As an operations manager, you have

been asked to compute the net present value $($NPV$)$ based on the marketing team's acquisition and cash

flow projections.

Facility Acquisition in Year $0$: $$875,000$

Weighted Average Cost of Capital $($WACC$)$: $8\mathrm{.}5\%$

Cash Flow in Year $1$:$$155,000$

Cash Flow in Years $2-8$: $10\%>$ Prior Year

Calculate the NPV and determine if the facility meets the organization's threshold for acceptance as

defined by the NPV metric.

$*$In MS Excel, the initial outlay, $$875,000,$ should not be included in the NPV function. Instead, account

for the initial outlay after executing the NPV function. In order to receive full credit, the NPV calculation

must be executed via MS Excel's NPV function. In the MS Excel workbook, calculate the NPV value,

state Accept or Reject, and provide an explanation for your decision. You do not have to submita

MS Word file.