Week Six Assignment Below, I am including the projected cash flows for a long term capital project.

Week Six Assignment

Below, I am including the projected cash flows for a long term capital project. The project has the following cash flows (negative numbers represent cash outflows and positive numbers represent cash inflows): • YR 0 = -$50 Million • YR 1 = $7 Million • YR 2 = $7 Million • YR 3 = $7 Million • YR 4 = $7 Million • YR 5 = $10 Million • YR 6 = $10 Million • YR 7 = $10 Million • YR 8 = $12 Million • YR 9 = $12 Million • YR 10 = $12 Million plus the company stops the projects and sells off the project for an

additional $16 Million inflow. Thus, total inflows at year ten equals $28 Million.

The company wishes to earn 12% on this project (here, we assume the company computed its cost of capital at 12%).

Compute the NPV and IRR for the above project. You can turn in an excel sheet for this assignment. As an alternative, you can turn in a word file (if you turn in a word file show your work). Regardless, this assignment only requires you to turn in one file.