Make spreadsheet to show a reasonable analysis

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Question - In year 0 of project A, your company is required to make $1M investment but in year 1, 2, 3, 4, 5, and 6 the investment level is only $250K per year. Benefits are forecasted to start in year 3 and continue for the next 20 years varying by each year. Breakeven period is somewhere between year 6 and 7. There is another project alternative (call it project B) that is known but not pursued because the payback period is after year 10 and so the current engineering manager assigned to conduct the economic analysis did not consider this alternative.

(a) Should the company invest the time and effort in conducting an analysis for the alternative project? Why or Why not?

(b) Make spreadsheet to show a reasonable analysis for the 20-year period. Use numbers provided and make-up numbers that have not been provided to you as part of this question.

Reference no: EM132531165

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