# NPV Calculations for Expanding Company.

I need help calculating the attached spreadsheet, If I subtract the metrics in red from the metrics in black how will this calucate the required values for the PV and NPV? I know the PV is the present value factor, but how do I find the PV cash flows to calculate the NPV? A firm is going to expand into 5 domestic markets (Chicago, Dallas, Miami, New York, and Charlotte), Germany, and Brazil. The CFO has developed cost and benefits of the scenario in a spreadsheet. Accodrding to the spreadsheet a present value analysis is needed to discount the cash flows. How do I Include the calculations for net income, operating cash flows, free cash flows and the present value cash flows and NPV in the spreadsheet. Will the project have a positive or negative NPV? What are the implications for the firm and its shareholders if there is a positive NPV or a negative NPV. Is the dollar value of the NPV important in light of the expenditure? In making the final decision, what kind of economic assumptions should be made? Should this investment be Accepted or Rejected? Why? How will a positive NPV affect share price? Articulate the economic and political risk with the strategy and list options to overcome. How will this decision affect the share price and the value of the company? In light of all this information, is there support in the above-mentioned option for expansion? Why or why not. What strategies are there to Overcome the Economic and Political Risks? Thank you

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Answer:

A firm is going to expand into 5 domestic markets (Chicago, Dallas, Miami, New York, and Charlotte), Germany, and Brazil. The CFO has developed cost and benefits of the scenario in a spreadsheet. Accodrding to the spreadsheet a present value analysis is needed to discount the cash flows. How do I Include the calculations for net income, operating cash flows, free cash flows and the present value cash flows and NPV in the spreadsheet. Will the project have a positive or negative NPV? What are the implications for the firm and its shareholders if there is a positive NPV or a negative NPV. Is the dollar value of the NPV important in light of the expenditure? ...

#### Solution Summary

NPV calculations for expanding company is examined.