I need the following questions answered:
Problem 25 (Ch. 8) ofFundamentals of Corporate Finance
Problem
8 (Ch. 21) of Fundamentals of Corporate
FinanceBoth are attached. Responses need to be entered on the Excel workbook provided with questions answered. Please help!!!!!!!!
450000
0
45000
8000
0
-53000
-530001
40000
16000
6000
11250
20900
18660.7142857142832
30000
12000
4000
11250
17300
13791.4540816326520.12
3
20000
8000
2000
11250
13700
9751.38939504372870.4
4
10000
4000
0
11250
10100
8706.597674146187350910.155436536854000030000
-61706.59767414618520000100000-4500000000-45000 Page
0
0
0
0
0
0
01
0
0
0
0
0
02
0
0
0
0
0
03
0
0
0
0
0
04
0
0
0
0
0
00000 Page
Expenses
Depreciation
Tax rate
Working Capital
20% Revenue
40% Revenue
SL 4 yrs
Opp Cost of Capital
DATA
Immediate Investment
Revenues Year 1
Thereafter
YEAR
REVENUES
EXPENSES
WORKING
CAPITAL
DEPRECIATION
CASH FLOW
Revenues Year 2
Revenues Year 3
Revenues Year 4
NPV CASH FLOW
Sum of NPV y1234
Add NPV Initial investment (J4) and sum NPV Y1-4 (J9)
Using NPV formula for CF year 1234 and subtract initial investment
+
depreciation * tax rate
Net income * (1-tax rate)
decrease in working capital from previous year
CASH FLOW =
IRR-INSERT IRR FORMULA IN CELL I13
Additional costs
Additional Questions
What effect would an increase of 2% in the Opportunity Cost of Capital have on the cash flow?
Would you accept this project at higher interest rates?

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