see attached doc
Prof Feedback for the Project Financial Decision making for Managers.
On the cost of capital tab, please review and resubmit question 4. On the capital budgeting tab, I will send you hints by email.
Hints are below. Contact me with questions!
Cost of Capital Tab
- WACC = ((.1901)(.0290)) + ((.8099)(.08))
Notes: For example, 4324/22744=.1901. The .08 is suggested from earlier answers found. Also, (1-tax rate)(.04)=.0290.
- For reference, Year 0 is -370. There are other values for examples of how to do other years. There are no depreciation values after year 8.
- Use the NPV and IRR formulas in Excel with the cash flows from question 2 (column H in Excel column label). For reference, the NPV should be positive and you will find that the project will be accepted.
- For reference, Year 0 is -370, and other values are somewhat lower generally.
- Use NPV and IRR in Excel.
- Discuss your findings.