Using the number of capital expenditures incurred in 2018 from 4b above (which will consider being an initial investment outflow), assume the company will generate operating cash inflows of $205 million the first year, $385 million the second year, $478 million the third year, $599 million the fourth year, $625 million the fifth year, and $100 million the sixth year. The risk-free rate is 2%, the market return rate is 8%, and the beta is 0.52. WACC= 3.56%. Capital expenditure from 4b= -$ 1976.4 Million

a. What is the NPV using the company’s WACC calculated in 4a above and what is the IRR?

b. Did the company make a good investment decision using the NPV criteria?

c. The company had a discounted payback period policy of four years, did it make a sound investment decision (use the company’s calculated WACC)?

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Balance Sheet ASSETS 8,756.3 181.5 8,937.8 Cash And Equivalents 1,708.4 1,530.1 2,128.8 2,462.3 Short Term Investments 135.4 81.3 134.4 228.6 Total Cash & ST Investments 1,843.8 1,611.4 2,263.2 2,690.9 Accounts Receivable 631.0 719.0 768.8 870.4 693.1 Other Receivables 68.0 955.4 Total Receivables 631.0 719.0 768.8 938.4 1,648.5 Inventory 1,378.5 1,364.0 276.7 1,090.9 1,306.4 1,400.5 Prepaid Exp. 256.9 283.4 319.7 482.9 Deferred Tax Assets, Curr. 317.4 Other Current Assets 28.7 50.8 27.7 13.4 24.5 Total Current Assets 4,168.7 3,971.0 4,757.9 5,283.4 12,494.2 Gross Property, Plant & Equipment Accumulated Depreciation Net Property, Plant & Equipment 9,641.8 (5,553.5) 11,584.0 (6,664.5) 4,919.5 8,581.1 10,573.3 13,197.1 (5,062.1) 3,519.0 (6,039.5) (7,268.0) 5,929.1 4,088.3 4,533.8 Long-term Investments 833.3 664.5 1,496.2 1,023.9 602.4 Goodwill 856.2 1,575.4 1,719.6 1,539.2 3,541.6 Other Intangibles 273.5 520.4 516.3 441,4 1,042.2 Deferred Tax Assets, LT 903.3 1,180.8 885.4 795.4 134.7 Other Long-Term Assets 198.9 415.9 403.3 362.8 412.2 Total Assets 10,752.9 12,416.3 14,312.5 14,365.6 24,156.4 LIABILITIES 684.2 884.3 Accounts Payable 533.7 730.6 782.5 1,179.3 Accrued Exp. 1,198.7 894.3 891.0 1,034.7 Short-term Borrowings Curr. Port, of LT Debt Curr. Income Taxes Payable 399.9 349.9 272.0 259.0 368.4 226.6 286.6 Unearned Revenue, Current 794.5 983.8 1,171.2 1,288.5 1,642.9 Other Current Liabilities 239.8 836.8 982.4 1,032.1 1,190.8 Total Current Liabilities 3,038.7 3,648.1 4,546.8 4,220.7 5,684.2 Long-Term Debt 2,048.3 2,347.5 3,185.3 3,932.6 9,090.2 Capital Leases 53.6 Unearned Revenue, Non-Current 4.4 6,775.7 Def. Tax Liability, Non-Curr. 6.9 43.4 14.7 6.3 270.2 Other Non-Current Liabilities 385.3 557.5 675.0 744.6 1,106.7 Total Liabilities 5,479.2 6,596.5 8,421.8 8,908.6 22,980.6 Common Stock 0.7 1.5 1.5 1.4 1.3 Additional Paid In Capital Retained Earnings Treasury Stock Comprehensive Inc. and Other Total Common Equity 39.4 41.1 41.1 41.1 41.1 5,206.6 5,974.8 5,949.8 5,563.2 1,457.4 (108.4) 5,884.0 (330.3) 1,169.5 25.3 (199.4) 5,818.0 (155.6) 5,272.0 5,450.1 Minority Interest 1.7 1.8 6.7 6.9 6.3 Total Equity 5,273.7 5,819.8 5,890.7 5.457.0 1.175.8 Total Liabilities And Equity 10,752.9 12,416.3 14,312.5 14,365.6 24,156.4 Supplemental Items Total Shares Out. on Balance Sheet Date 1,499.1 1,485.1 1,460.5 1,431.6 1,309.1 Balance Sheet ASSETS 8,756.3 181.5 8,937.8 Cash And Equivalents 1,708.4 1,530.1 2,128.8 2,462.3 Short Term Investments 135.4 81.3 134.4 228.6 Total Cash & ST Investments 1,843.8 1,611.4 2,263.2 2,690.9 Accounts Receivable 631.0 719.0 768.8 870.4 693.1 Other Receivables 68.0 955.4 Total Receivables 631.0 719.0 768.8 938.4 1,648.5 Inventory 1,378.5 1,364.0 276.7 1,090.9 1,306.4 1,400.5 Prepaid Exp. 256.9 283.4 319.7 482.9 Deferred Tax Assets, Curr. 317.4 Other Current Assets 28.7 50.8 27.7 13.4 24.5 Total Current Assets 4,168.7 3,971.0 4,757.9 5,283.4 12,494.2 Gross Property, Plant & Equipment Accumulated Depreciation Net Property, Plant & Equipment 9,641.8 (5,553.5) 11,584.0 (6,664.5) 4,919.5 8,581.1 10,573.3 13,197.1 (5,062.1) 3,519.0 (6,039.5) (7,268.0) 5,929.1 4,088.3 4,533.8 Long-term Investments 833.3 664.5 1,496.2 1,023.9 602.4 Goodwill 856.2 1,575.4 1,719.6 1,539.2 3,541.6 Other Intangibles 273.5 520.4 516.3 441,4 1,042.2 Deferred Tax Assets, LT 903.3 1,180.8 885.4 795.4 134.7 Other Long-Term Assets 198.9 415.9 403.3 362.8 412.2 Total Assets 10,752.9 12,416.3 14,312.5 14,365.6 24,156.4 LIABILITIES 684.2 884.3 Accounts Payable 533.7 730.6 782.5 1,179.3 Accrued Exp. 1,198.7 894.3 891.0 1,034.7 Short-term Borrowings Curr. Port, of LT Debt Curr. Income Taxes Payable 399.9 349.9 272.0 259.0 368.4 226.6 286.6 Unearned Revenue, Current 794.5 983.8 1,171.2 1,288.5 1,642.9 Other Current Liabilities 239.8 836.8 982.4 1,032.1 1,190.8 Total Current Liabilities 3,038.7 3,648.1 4,546.8 4,220.7 5,684.2 Long-Term Debt 2,048.3 2,347.5 3,185.3 3,932.6 9,090.2 Capital Leases 53.6 Unearned Revenue, Non-Current 4.4 6,775.7 Def. Tax Liability, Non-Curr. 6.9 43.4 14.7 6.3 270.2 Other Non-Current Liabilities 385.3 557.5 675.0 744.6 1,106.7 Total Liabilities 5,479.2 6,596.5 8,421.8 8,908.6 22,980.6 Common Stock 0.7 1.5 1.5 1.4 1.3 Additional Paid In Capital Retained Earnings Treasury Stock Comprehensive Inc. and Other Total Common Equity 39.4 41.1 41.1 41.1 41.1 5,206.6 5,974.8 5,949.8 5,563.2 1,457.4 (108.4) 5,884.0 (330.3) 1,169.5 25.3 (199.4) 5,818.0 (155.6) 5,272.0 5,450.1 Minority Interest 1.7 1.8 6.7 6.9 6.3 Total Equity 5,273.7 5,819.8 5,890.7 5.457.0 1.175.8 Total Liabilities And Equity 10,752.9 12,416.3 14,312.5 14,365.6 24,156.4 Supplemental Items Total Shares Out. on Balance Sheet Date 1,499.1 1,485.1 1,460.5 1,431.6 1,309.1