Please help me with this maths question.?

Use excel to evaluate a 5 year capital investment project with an initial investment of 拢150 million, a residual value for the assets at the end of the project of 拢50 million and the following projected sales volumes

Year 1 - 25
Year 2 - 35
Year 3 - 50
Year 4 - 55
Year 5 - 30

If possible, could you please send me the answer to my email address:
josieyuen@hotmail.com

Many Thanks.

Put your values across (or whatever way you want it). I assume A1=year 1, A2=Year 2 etc

To evaluate a project is basically to find the net present value of the project. So you have to have a RRR- required rate of return to discount the cash flows. I assume 12%

Now go to Insert - Functions - NPV
In the first box, put 0.12
Go to the second box and select the cash flows (A1 thru E1). Rememer 150 is incurred in year 0 not in year 1. So we do not select it. Also add the remaining 50 to the year 5's amount before you do this formula (30+50)

Then you'll get a NPV of the cash inflows. Deduct from that amount the initial investment of 150. If it is a positive figure, the project can be accepted.

2. The other option is to uss IRR - internal rate of return where you find the rate at which NPV is zero. It is very easy.

Add year 0 column also and put -150(negative).
Insert - Functions - IRR

Select the range. Then you will get a rate. (I got 16%). As long as the RRR is less than 16%, you can accept the project.

(I think some use the word "hurdle rate" for RRR.)

I get a return on the project of 14.8%.

Do you know what the discount rate is supposed to be? If you give me that I could send you a spread sheet.