** please show work and steps on excel if possible ** confused on how to on excel ( make chart

prepare a

spreadsheet that gives the

Payback

Discounted Payback

NPV

IRR

Your company has the opportunity to make an

investment in a new piece of machinery that could

produce a revenue stream for the company. The cost of this project is $750,000. It is estimated that the project will bring in $225,000 each year. Below are how the various employees in the company feel the cash flows

and hurdle rates should be treated.

Richard - Richard from Accounting feels the project would have a 5-year life and should use the company's cost of capital of 12%.

Anne - Anne from sales is convinced that the project will

bring in MORE than $225,000 each year. She believes that years 2-5 will bring in 10% more than the previous year. Anne also feels the hurdle rate should be 12%.

Caroline - Caroline, the Product Manager really wants the company to buy this machine. She feels the machine will produce cash flows longer than five years. She estimates that there will be 7 years of cash flows, not 5.

Caroline feels the 12% hurdle rate is accurate.

From a strictly financial standpoint, which scenario

brings in the highest amount of money?

2. Do any of the scenarios give a conflicting answer

where NPV says yes, but IRR says no, or visa versa?

3. Which scenario should the company pick?

explajn