Below are four cases that you will have to solveusing Excel spreadsheets.3rd CaseThe company MEGAMAX SA is analyzing two possibilities to expand the market, one of them is to choose to expand the plant to be able to produce a greater numberof products, the other option is to diversify production with different new productsto take advantage of the facilities that currently owns; The information andprojections you have to be able to carry out the analysis to make a decision are thefollowing:PROJECTInitialinvestmentINCOMEEXPENSESINCOMEExtension $810,000 EXPENSESDiversification $900,000It is requested:ConceptYear 1cash flows5. Determine the internal rate of return.6. Determine the present value.7. Determine the recovery period.8. Define which is the most viable project.Year 2cash flows$1,000,000$400,000The discount rate for the project will be 12%, and investors propose aMARR of 28%.$550,000$600,000$1,100,000 $900,000$400,000 $500,000Year 3cash flows$1500,000$500,000$750,000$600,000

NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Answered: Below are four cases that you will have…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter13: Agency Conflicts And Corporate Governance

Section: Chapter Questions

Problem 1eM

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Can someone help me figure out this problem? Complete the following homework scenario:Compare the results of the three methods by quality of information for decision making. Using what you have learned about the three methods, identify the best project by the criteria of long term increase in value. (You do not need to do further research.) Convey your understanding of the Time Value of Money principles used or not used in the three methods. Review the video titled "NPV, IRR, MIRR for Mac and PC Excel" (located at and previously listed in Week 4) to help you understand the foundational concepts:Scenario Information:Assume that two gas stations are for sale with the following cash flows: CF1 is the Cash Flow in the first year, and CF2 is the Cash Flow in the second year. This is the timeline and data used in calculating the Payback Period, Net Present Value, and Internal Rate of Return. The calculations are done for you. Your task is to select the best project and explain your…
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