1. Using the template provided, analyze the project #1 with Net Present Value, Internal Rate of Return, Payback Period, and Modified Payback Period.
2. Repeat the NPV, IRR, Payback, and Modified Payback analyses for high and low confidence estimates of the project's net annual positive cash flows.

Josephine Joline Jones, Chief Financial Office of Jo Jo's Circus has been investigating opportunities to expand her operations.

Project #1: Dancing Horses on Parade

• Requires the purchase and training of thoroughbred Clydesdale horses, estimated to cost $1,931,400 upfront.
• In addition, due to the seasonal and transitional nature of the circus industry, Jo Jo estimates that she will need to dedicate working capital of $38,000 at the beginning of the project. The $38,000 working capital will become available once the project's life is over.
• Jo Jo expects the project to yield positive net annual cash flows over the project's expected 8-year life as follows:
• End of 1st Year: $320,000
• End of 2nd Year: $384,000
• End of 3rd Year: $480,000
• End of 4th Year: $565,000
• End of 5th Year: $685,000
• End of 6th Year: $531,000
• End of 7th Year: $424,700
• End of 8th Year: $340,000
• Although Jo Jo full expects the project to be successful, she believes that the Net Annual Cash Flows may range between 80% and 120% of her estimates above.
• Jo Jo expects to retire and sell the horses at the end of the 8 years for $112,500.
• Jo Jo's investors require 15% return on their invested cash each year. The circus has managed to secure a tax haven such that they do not expect to pay any income taxes over the foreseeable future.

Please show all the Excel formula

Capital Budgeting Case Template Cash Flow Information Initial Investment Working Capital Salvage Value Expected Project Life (Years) Year #1 Year #2 Year #3 Year #4 Year #5 Year #6 Year #7 Year #8 Net annual operating cash flows nvestors Cost of Capital (Required Return 0 Initial Investment Net annual operating cash flows Working Capital Salvage value of equipment Total Net Cash Flows x present value discount factor Present Value of Cash Flows Net Present Value Recommendation? Low Confidence Net Present Value Recommendation? High Confidence Net Present Value Recommendation? Part 2 - Calculate the Internal Rate of Return of the Capital Investment: Intemal Rate of Return Recommendation? Low Confidence Intemal Rate of Retum Recommendation? High Confidence Intemal Rate of Retum Recommendation? Part 3 - Calculate the Payback Period of the Capital Investment: Today End of Year End of Year End of Year End of Year End of Year End of Year End of Year End of Year Payback Method 0 6 8 Cumulative Cash Flows Payback Year years Low Confidence Payback Year years High Confidence Payback Year years Part 4 - Calculate the Modified Payback Period of the Capital Investment: End of Year End of Year End of Year End of Year End of Year End of Year End of Year End of Year Modified Payback Method Today 5 Cumulative Cash Flows Payback Year years Low Confidence Payback Year years High Confidence Payback Year years