Objective: Students demonstrate ability to

1. Utilize several capital budgeting concepts. 2. Complete required calculations. 3. Present oral recommendation to senior management based on resulting data.

Scenario: D & H Enterprises is considering building a new plant overseas or expanding their product line. Cost will be $2,500 million for either option. Discount rate for both projects is 11%.

Cash inflows for each options are below. Shown in millions:

Year	Option A: Build New	Option B: Expand Line
1	$ 500	$ 500
2	750	1500
3	1200	3500
4	2000	4000

Directions: Utilizing cell references and formulas, use the data in the Excel file provided to prepare

A. Calculations use the tabs provided for details of calculations move final values to summary tab using cell references.

1. Payback period calculation. Textbook page 384 has example. You need to use Excel to make your calculations.

2. Net Present Value utilize the NPV formula under the Formulas, Financials, tab. *See Table 12.4 in text page 386 for example.

Assume 11% as discount rate.

***please be detailed in excel.. I really want to learn