The “Capital Project Case Study, Part 2” spreadsheet provides cash flow data (costs and benefits) for the proposal. Download and save this Excel spreadsheet, and use the information provided to complete the following:
Determine the cash inflows and outflows for each year.
Evaluate the capital project by calculating the following metrics:
Net present value (NPV)
Internal rate of return (IRR)
Modified internal rate of return (MIRR)
Payback period
Discounted payback period
Indicate whether the project is acceptable, assuming Jiranna has a corporate policy of not accepting projects that take more than 3.5 years to pay for themselves, and assuming an 11% cost of capital.