question archive 3) A Company has been offered the possibility of entering two projects: a) A ?ve years project that consists on an initial investment of 100,000 EUR and a set of 5 yearly revenues of 30,000 EUR from year 1 onwards b) A ten years project that consists on an initial investment of 100
3) A Company has been offered the possibility of entering two projects: a) A ?ve years project that consists on an initial investment of 100,000 EUR and a set of 5 yearly revenues of 30,000 EUR from year 1 onwards b) A ten years project that consists on an initial investment of 100
Subject:MathPrice: Bought3
3) A Company has been offered the possibility of entering two projects: a) A ?ve years project that consists on an initial investment of 100,000 EUR and a set of 5 yearly revenues of 30,000 EUR from year 1 onwards b) A ten years project that consists on an initial investment of 100.000 EUR and a set of 10 yearly revenues of 20,000 EUR from year 1 onwards. The cost of capital is 12%, and the company's CEO has stablished a policy for capital expenditures requiring a payback below five years. From the point of view of the payback period, what is the best option, explain why. (20 points) 4.- The expected annual net cash inflow form a project is 25,000 EUR over the next 5 years. The required investment now in the project is 80,000 EUR. What is the Internal Rate of Return on the project? (15 points)
