I need help with the attached project management document.

I need help with the attached project management document. I will
be in the hospital for the next couple of days for ongoing testing. But I have my laptop and can check back to see if you have any questions for me. If you can assist please let me know. And please let me know where I go to pay and tip. Thank you!

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Session 2 Individual Assignment – IA2Forecast the Net Present Value of a project given the cash in±ows and cash ouTlows of the project. ²henuse this informa³on to simulate the uncertainty of forecas³ng a project’s NPV.A likely scenario might be:Project A is a mul³-year project; it begins on January 1, 2011 and is scheduled to end onDecember 31, 2014 (´xed cost is $215,000)²he cash ouTlow for Project A is es³mated at $100,000 at the beginning in the ´rst year of theproject, $50,000 at the end of the year, $50,000 in 2012, and a ´nal cash payment of $15,000 in2014.²he cash in±ow for Project A is es³mated at $0 for the ´rst year, $25,000 in 2012, $120,000 in2013, and ´nally, $200,000 in 2014.²he company desires a 12% return rate on their investment to consider the project. ²hecompany also believes that in±a³on will remain constant at 2% per year.Given this informa³on we can determine the NPV of Project A using a simple Excel spreadsheet. We canthen use Crystal Ball to simulate the uncertainty associated with forecas³ng the NPV of Project A. ²able 1is an example of the spreadsheet, or Discounted Cash Flow model, developed to calculate Project A’sNPV.²he Excel spreadsheet (aµached) contains the actual data and formulas used for this exercise.Project AYearInfowOutlowNeTFlowDiscounTFacTorNeTPresenTValueInfa±onRaTe*2011$0$100,0000.022011$0$50,0000.022012$25,000$50,0000.022013$120,000$00.022014$200,000$15,0000.02²oTal²able 1 – Project A Cash Flow Analysis(a). Complete ²able 1 to calculate Project A’s NPV. ²he net cash ±ow of Project A is calculated by takingthe total of all years’ net ±ow, and when discounted at the rate of 12% (required rate of return forproject selec³on) plus the annual in±a³on rate of 2%, the net present value of the project’s cash ±owcan be es³mated. So, at ´rst glance, the project would seem to be a good candidate for selec³on. Butthere are uncertain³es to this scenario. What if Project A does not generate the cash in±ows es³matedhere, or at the ³me the in±ows are expected? Perhaps the annual in±a³on rate is 3% rather than 2%. Wecan use Crystal Ball to simulate the risk, or uncertainty, involved in using NPV for project selec³on.
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Crystal Ball allows us to view Project A’s NPV in ranges rather than a single value as seen in the singlepoint value (Total NPV) in the spreadsheet. To determine this range of values we have to consider thevariability of certain inputs to our cash Fow model. It is likely that cash inFows will not be a ±xed amountthroughout the project, but we know that if we are dealing with a ±xed price contract, the cash ou²lowsare ±xed in the years indicated in the spreadsheet. Another poten³al variability in the model is theinFa³on rate; it may also change during the project. These variables will be de±ned as ‘assump³ons’ inCrystal Ball, because we are making the assump³ons about the values for cash inFows and the inFa³onrate.The total NPV for Project A is what we want to ‘forecast’.Steps to develop your Discounted Cash ´low Model in Excel and run Crystal Ball simula³on:1.Enter data for cash inFow, cash ou²low, and inFa³on rate.2.Calculate net cash Fow, discount value, and NPV (yellow highlighted cells) using the formulasgiven (´igure 1).3.Calculate totals (inFow, ou²low, net Fow, and NPV) using the given formula for SUM (yellowhighlighted cells in Row 8).´igure 1 – Excel worksheet with formulas
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