Construct a Sensitivity Chart - Calculations of NPV and BCR - Accounting Assignment Help

Assignment Task :

TASK
You are required to perform a project appraisal for a new football stadium. There are two possible options for the new stadium. Option 1 is a smaller stadium, with low costs and option 2 requires a greater investment but provides a number of additional facilities and holds larger crowds and allows higher ticket prices to be charged. The recommended discount rate is 3%. Details of option 1 are presented below.

Option 1 
One off costs
The site will be purchased at a cost of $1.1m. The cost of planning is estimated as $50,000. Both the purchase of the land and the planning agreement must be in place before construction of the new stadium can begin. Construction is estimated to take one year. Construction costs estimated by the contractor, which occur in year 0, include site clearance and preparation estimated at around $1.2m. 
The prefabricated elements of the stands cost $2m, plant rental costs $40,000 per month (required for all 12 months). Wages for 80 workers cost $8 per hour, and a site manager costs $22 per hour. Estimated staffing times are 40 hours per week all year (47 weeks) for the site manager, and 38 hours per week for 80 workers all year (47 weeks). The stadium will require around 10 new employees, who will perform a range of jobs (including refreshments serving, cleaning etc.). There is an associated one?off human resource cost associated with the advertising, interviewing, and training of these staff which is estimated at $22,000. This cost will also occur in year 0.

TASKS
1. Data Summary Table. Construct an excel spread-sheet containing the relevant information provided above to perform a Cost Benefit Analysis. 
2. Calculations of NPV and BCR. 
a. Construct the costs and benefits that include the 20 year time period. 
b. Using the data on costs and benefits calculate the NPV and BCR associated with option 1 given a CBA period of twenty years. Assume that all impacts are realized at the end of each year. 
3. Sensitivity Analysis. Construct a sensitivity chart relating to changes in the discount rate. Use a range of -2% to 6%. 

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