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Marcal Corporation is considering a project would cost $5.5 million today and generate positive cash flows...

Marcal Corporation is considering a project would cost $5.5 million today and generate positive cash flows of $3 million a year at the end of each of the next 4 years. The project's cost of capital is 11%.

a. Calculate the project's NPV if the company proceeds now..

b. The company is fairly confident about its cash flow forecast, but expects to have better price information in 2 years. The company believes the cost would be $6.5 million in 2 years. It estimates there is a 70% change CFs will be $4.5 million for 4 years and a 30% change CFs will be $2 million for 4 years. Should the company proceed with the project now or wait 2 years until it has better information?

c. Apart from the calculationsabove,discuss3 qualitative factors that the company should considerwhenmaking its decision on accepting the new project.

PLEASE SHOW WORK IN EXCEL, THANK YOU

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