The firm's current project requires an initial investment of $15 million and has an estimated life of 10 years. The expected future cash inflows for the project are as shown below.
Year 1 $600,000
Year 2 $1,000,000
Year 3 $1,000,000
Year 4 $2,000,000
Year 5 $3,000,000
Year 6 $3,500,000
Year 7 $4,000,000
Year 8 $6,000,000
Year 9 $8,000,000
Year 10 $12,000,000
Create a spreadsheet to answer teh following questions.
a. Calculate the project's NPV. Is the project acceptable under the NPV technique? Explain.
b. Calculate the project's IRR. Is the project acceptable under the IRR technique? Explain.
c. In this case, did the two methods produce the same results? Generally, is there a difference between the NPV and IRR techniques? Explain.
d. Calculate the payback period for the project. If the firm usually accepts projects that have payback periods between 1 and 7 years, is this project acceptable?
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Don't need explanations, just comparing my answers. Thank
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