Rules: You are expected and required to do your own work on these assignments. You may not work together with anyone on the same computer. You may not share computer files. You may, however, work together with someone if you are using separate computers and doing your own work. You may ask anyone for help as long as you do your own work. The capital budgeting process is very important, and calculation of NPV and IRR are central to the accept/reject decision. NPV profiles provide a graphical view, and what-if analysis can show the effects of changes in key variables. Suppose your company must regularly choose between a pair of mutually exclusive projects. Given the cash flows for the project, perform the tasks described below in THREE separate worksheets. For the project cash flow data, use the data file provided under the assignment. Excel Assignment 4 Cash flows 2026 Spring.xlsx 1. In a worksheet named Your_last_name_NPV, (Moon_NPV for example): Name the discount rate using your last name, for example, Moon_CoC and use the name in your formula. Compute the NPV, IRR, and MIRR using the corresponding Excel functions and make appropriate interpretations of the computed numbers in your own words (not definitions). Your interpretations of the results must be by completing the following sentences For NPVs, Project A’s NPV suggests that the total value of the company would increase/decrease by $$$, while project B ; if they are independent, the company should choose ___; if mutually exclusive _____ For IRRs (MIRRs), the annual rate of return on the project A is expected to be ____ over xx years, while ; if they are independent, the company should choose ___; if mutually exclusive _____ Find the cross-over rate and make an interpretation of the result. It also should show what the NPV value is at the cross-over rate. Develop NPV profiles based on your input data. Have the discount rates range from 0% to 28% by a 2% increment. Put both projects A and B on the same chart and include labels appropriately. 2. In a worksheet named Your_last_name_Modified CF: Compute and interpret the payback period for each project. Compute MIRR for each project by creating relevant columns to transform the original cash flows to modified cash flows. Although I demonstrate how to compute Discounted Payback on the video, that is not part of the requirements for this project. 3. In a worksheet named Your_last_name_Unequal lives: Conduct an appropriate analysis for the unequal life projects that are mutually exclusive (hint: EAA), and explain your results. Be sure to make the decision using a =if() statement. Also Comment what the EAA amounts mean. ***There should be THREE separate worksheets named accordingly. Grading Rubric Points NPV IRR MIRR calculations 6 Interpretations 4 Paybacks and interpretations 4 What if (data table); Chart 5 Crossover rate and interpretation 2 MIRR- modified cash flows 5 EAA and interpretation 4 Total 30 *Discounted payback is NOT part of this assignmen
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