Homework 301)- Formulas Dea Revew View Help Tell me what you want to do File Hom

Question

Homework 301)- Formulas Dea Revew View Help Tell me what you want to do File Home Insert Page Layout Trece precedents Trace Dependents XRenove Anows Show Formulas Emor Checking ation. u" l Define Name Date&Lockup & Math&More Timr. Reference-Tng. Fu retom . AuboSum Recenty Financial Log cal Tet rsert Manager@ce te..om Selection Defined Names . Used . Funtion Lia Formuls Auding Year Cash flow cost of capital, 5% Acceptreject? Part d: to decide on a range of cost of capital to acceptreject, make a table of NPV for differentr Cost of capital, r NPV 750,000500,000500,000500,000 500,000500,000 2,000,000 10% 45% 4% 12% 26% What range of cost of capital should you accept the project

Explanation / Answer

Steps to calcullate NPV in Excel

Here let's take the example of 5%

The project is acceptable when discount rate ranges from 10% to 38%

Year 0 1 2 3 4 5 6 Cashflow(in $) (750,000)            500,000                  500,000               500,000               500,000               500,000 (2,000,000)

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