Plus the company stops the projects and sells

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Reference no: EM13939070

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. 

Reference no: EM13939070

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