Your grandma has set up a fund of $1,000,000 for you. You have to invest this money in a fixed asset project. As a resul
Posted: Sun May 29, 2022 6:01 pm
Your grandma has set up a fund of $1,000,000 for you. You have
to invest this money in a fixed asset project. As a result of your
feasibility study, you predict the following cash flow for the next
5 years:
Years Cash
flows DF (10%)
1
250,000
0.909
2
280,000
0.826
3
300,000
0.751
4
300,000
0.683
5
300,000
0.621
Scrap value of the project is expected to
be $400,000 assuming WACC is 10%;
a) Calculate the project's IRR and discounted payback
period.
b) Briefly state the selected location, which sector you chose,
and why.
to invest this money in a fixed asset project. As a result of your
feasibility study, you predict the following cash flow for the next
5 years:
Years Cash
flows DF (10%)
1
250,000
0.909
2
280,000
0.826
3
300,000
0.751
4
300,000
0.683
5
300,000
0.621
Scrap value of the project is expected to
be $400,000 assuming WACC is 10%;
a) Calculate the project's IRR and discounted payback
period.
b) Briefly state the selected location, which sector you chose,
and why.