Question: hello, i have a financial analysis assignment. Delta Link is considering an investment in a development project that is expected to cost 120M$ to be

hello, i have a financial analysis assignment.

Delta Link is considering an investment in a development project that is expected to cost 120M$ to be paid between 2021 and 2022 equally.

Upon completion of the project, the company estimates a revenue of 40M$ in 2023, growing at 5% per annum until 2028. In terms of costs, the estimate is at 5.5M$ for 2023, 6M$ for 2024 and 6.5M$ for 2025-2028. Management expects to sell the project in 2028 for 30% of the total initial investment.

The management is looking for a return that is not less than 20% and would like to return back its investment in no more than 5 years from completion of the development project.

Based on the above, calculate and interpret the following:

  1. Net present value
  2. Internal rate of return
  3. Payback period
  4. Discounted payback period

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!