Your company must decide to face one of three different projects. The required rate of return is established in 8% but it’s expected inflation to remain relatively constant at 2,5%. The three alternatives are of different costs and different savings capacities each year, considering 6 years as possible to maintain the savings, as represented in the following table:

a) Calculate the discount factor

b) Analyze each situation to determine what project could be best to select, justifying your decision by calculations.

	Project A	Project B	Project C
Cost	4.500.000,00 €	5.000.000,00 €	3.200.000,00 €
Savings each year	1.180.000,00 €	1.225.000,00 €	876.000,00 €

Answer rating: 100% (QA)

Project Analysis and Recommendation a Discount Factor Calculation The discount factor considers the ... View the full answer