Problem:
Please read the case study PDF document and data from the Excel sheet attached and answer the questions.
1) How do you compute the Free cash flows generated by the project?
2) How do you compute the Cost of Equity (COE or Ke) ? the Cost of Debt (COD or Kd), the WACC ?
3) How do you compute the net present value of the project?
4) Compute the sum of the NOPAT and the sum of the Free cash flows over the life of the project (for one of the 3 scenarios only and without discounting): what does it means with regards to the relationship which exists between the NOPATs and the Free Cash Flows?
5) Explain how you compute the payback, and the discounted payback (and give the values for one of the scenarios at least)
6) Compute the NPV for all 3 scenarios: would you undertake the project? Why?
Additional Information:
This question basically from Finance and it is about a scenario about Zhiang Liang Corporation. The data about the sales forecast has been given and based upon the information questions such as free cash flows generated, computing cost of equity, net present value of the project, etc have been answered in the solution comprehensively.