Question: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 PV of the Cash Flows

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 PV of the Cash Flows NPV IRR Payback
-200 -300 -400 200 400 1,000 1,000 1,000 1,000 1,000 $1,633.14 ($366.86) 10.05% 8 Years
-200 -200 100 400 400 1,500 1,500 1,500 1,500 1,500 $3,179.87 $679.87 15.96% 7 Years
-300 -400 -100 600 700 2,000 2,000 2,000 2,000 2,000 $4,075.03 $1,075.03 16.75% 7 Years
-100 100 200 400 200 800 800 800 800 800 $2,077.72 $577.72 17.95% 6 Years
-50 -100 200 200 300 600 600 600 600 600 $1,498.18 $498.18 19% 6 Years
150 150 150 150 150 750 750 750 750 750 $2,021.19 $1,271.19 33.35% 5 Years
-175 200 250 250 300 700 700 700 700 700 $1,888.87 $1,088.87 28.02% 5 Years
-100 275 325 325 325 1,500 1,500 1,500 1,500 1,500 $3,714.02 $2,214.02 28.87% 6 Years
-200 -150 250 350 350 $261.53 ($438.47) -4.15% No Payback
-175 -100 175 175 175 $95.10 ($504.90) -13.28% No Payback
-300 -200 300 400 400 $258.56 ($491.44) -3.55% No Payback

A. Construct and recommend between three and five metrics to measure the performance of the new operating strategy. At least one metric should reflect dividend policy as it relates to rewarding shareholders.

B. Prepare an executive summary describing your recommendations for each project and the overall cost, net cash flows, and expected returns of the operating configuration that you recommend. Be sure to justify your recommendations in terms of the investment criteria applied in Step 3 above. Be sure to report the full cost of the facility as it is configured per your recommendations. Present and justify your operating strategy performance metrics.

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