Question: Additional Case Study Problem (Philippine Context): Scenario: A Filipino food manufacturing company, Lutong Bahay Inc., is considering an investment in a new production facility in

Additional Case Study Problem (Philippine
Additional Case Study Problem (Philippine Context): Scenario: A Filipino food manufacturing company, Lutong Bahay Inc., is considering an investment in a new production facility in Laguna to expand its distribution across Luzon. The initial investment required is PHP 20 million, and the expected annual cash flows are: Year 1: PHP 5 million Year 2: PHP 6 million Year 3: PHP 7 million Year 4: PHP 8 million Year 5: PHP 9 million The company's required rate of return is 12%. Tasks: 1. Calculate the NPV of the project. 2. Determine the IRR of the project. 3. Perform a sensitivity analysis by adjusting the discount rate to 14%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!