Question: Please show and explain how to solve this problem in EXCEL step by step how to input in Excel and highlight the answers. Thank you!
Please show and explain how to solve this problem in EXCEL step by step how to input in Excel and highlight the answers. Thank you!
(Please cover bonus question!)
You are considering the following three projects. A & B are mutually exclusive while C is independent.
Following are their expected cash flows
| year | project A | Project B | Project C |
| 0 | -60,000.00 | -40,000.00 | -20,000.00 |
| 1 | 0 | 40,000.00 | 35,000.00 |
| 2 | 82,000.00 | 40,000.00 | 30,000.00 |
| 3 | 60,000.00 | 20,000.00 | 2,000.00 |
| 4 | 20,000.00 | 10,000.00 | -40,000.00 |
Assuming no capitol rationing a required rate of return (cost of capital) of 12% for all three projects.
1) Calculate NPV for project A, B and C.
2) Calculate IRR for project A, B and C (including 2 IRRs for project C).
3) Calculate PI for project A
4) Using cost of capital, as a financing and reinvestment rate, calculate MIRR for project C.
5) If A&B profiles cross, calculate the exact crossover rate between project A & B.
6) Which of the three projects, if any, should be accepted and why? (Remember A & B are mutually exclusive while C is independent.
Please highlight and label each of your answers on the spread sheet.
Format all your answers to show 2 decimal places.
Bonus: On one graph, plot the NPV profile for Both projects, A&B.
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