Calculate using Excel formulas, the NPV of each of the 3 projects. It is possible...
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Calculate using Excel formulas, the NPV of each of the 3 projects. It is possible that ABC Company may not be able to complete all 3 projects. Therefore, advise ABC Company as to the order in which they should pursue the projects (i.e., which project should ABC Company attempt to do first, second, and last).
ABC Company's management is also considering 3 new projects consisting of the purchase of new equipment. The company has limited resources, and may not be able to complete make al 3 purchases. The information is as follows for the purchases below Project 1 $80,000 5% Project 2 Project 3 Purchase Price $175,000 $22,700 Required Rate of Return 5% 12% Time Period 2 years $13,000 $13,000 3 years 5 years Cash Flows - Year 1 S48,000 $85,000 $74,000 $38,000 $26,800 $19,000 Cash Flows - Year 2 S36,000 Cash Flows - Year 3 $22,000 N/A Cash Flows - Year 4 N/A N/A Cash Flows - Year 5 N/A N/A
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