Problem:
Disney Resorts is considering a five-year project that will cost $150 million to build, and will generate the following cashflows:
Year 1: $20 million
Year 2: 35 million
Year 3: 40 million
Year 4: 50 million
Year 5: 55 million
Question 1: Calculate the NPV and IRR of this project. If Disney's cost of capital for similar projects is 20%, do you recommend that they go ahead with this project?
Note: Please provide reasons to support your answer.