Question

i have a group project that I need do and im currently stuck for my section of and i really need help.

Word (Unlicensed Product) References Mailings Review View Help [email protected] Tell me what you want to do A L A À AS - x x AA AaBbced AaBbcod AaBbc Aabbcc AaB AabCD Abcd Abend 1 Normal 1 No Spac. Heading 1 Heading 2 Title Subtitle Subtle Em Emphasis Font Paragraph Styles The BA213 Corporation would like you to perform NPV and IRR analysis for two prospective capital investment projects. The data for these two projects is contained on the Data tab of the Excel workbook provided for this assignment. Assignment Requirements: 1. Use the Excel Workbook provided to compute the NPV and IRR of the two initial plans. Format your work using the exhibit on page 1487 of your text as an example. Complete your work for the initial data on the initial NPV IRR tab of the Excel Workbook provided. Recalculate the NPV and IRR of the two plans assuming that the initial cost of the plans will be $5,500,000. Complete your work for these revised numbers on the Revised NPV IRR tab of the Excel workbook provided. Answer the following questions in a Word document: a. Referring to your calculations for the initial project costs, which plan, if any, should the company adopt and why? What qualitative factors other than financial analyses may the company consider in making their decision? Please state at least 3 specific items. Explain the relationship between NPV and IRR. Discuss the application of this relationship to the results you obtained for your calculations of the initial plans. c. Considering the results of the analysis with the lower cost (requirement 2): f the company has the resources to pursue both plans, what would you recommend? il the company may only pursue one plan, what would you recommend? 4. Submit your Excel and Word documents in your Blackboard/elearn course assignment area. Chec unre put Specific Instructions: 1. Download the Excel Workbook provided for this assignment. Save the Excel document and create your Word document with your first initial and last name. Example: Lastname BA213NPVIRR. 2. Construct your NPV IRR tables using the example format in your text. You must use the o the factors invided in the table in

Answer 1

1	Project Name	BA211	BA212
	Initial Cash flow
	Yearly Cash inflow	-$6,000,000	-$6,000,000
	1	$1,400,000	$1,400,000
	2	$1,400,000	$1,700,000
	3	$1,400,000	$2,000,000
	4	$1,400,000	$1,700,000
	5	$1,400,000	$1,400,000
	6	$1,400,000	$1,000,000
	7	$1,400,000	$700,000
	8	$1,400,000	$400,000
	9	$1,400,000	$100,000
	10	$1,400,000	$3,600,000
	Rate	20%	20%
	NPV	($130,539.08)	$111,171.59
		NPV(C15,C5:C14)+C4	NPV(D15,D5:D14)+D4
	IRR	19%	21%
		IRR(C4:C14)	IRR(D4:D14)
2	Project Name	BA211	BA212
	Initial Cash flow
	Yearly Cash inflow	-$5,500,000	-$5,500,000
	1	$1,400,000	$1,400,000
	2	$1,400,000	$1,700,000
	3	$1,400,000	$2,000,000
	4	$1,400,000	$1,700,000
	5	$1,400,000	$1,400,000
	6	$1,400,000	$1,000,000
	7	$1,400,000	$700,000
	8	$1,400,000	$400,000
	9	$1,400,000	$100,000
	10	$1,400,000	$3,600,000
	Rate	20%	20%
	NPV	$369,460.92	$611,171.59
		NPV(C35,C25:C34)+C24	NPV(D35,D25:D34)+D24
	IRR	22%	23%
		IRR(C24:C34)	IRR(D24:D34)
3(a)	Based on the above calculation Company should opt for project BA 212 as it has a positive NPV and IRR is greater than required rate of return.
3(b)	When NPV is positive, IRR is greater than required rate of return. When NPV is negative IRR is less than required rate of return.
	In the above example, in case of proejct BA211 IRR is 19 % which is less than 20% as NPV was negative.
3©	IF the company have resources it should opt for both projects in requirement 2 as both projects have positive NPV and IRR is greater than required rate of return