Question: Overview of cash flows for 3 different projects: (Values in million US$) Annual risk-free rate: 1.5%. Market risk premium: 4.5%. If only one project can

Overview of cash flows for 3 different projects: (Values in million US$)

Annual risk-free rate: 1.5%.

Market risk premium: 4.5%.

Overview of cash flows for 3 different projects: (Values in million US$)

If only one project can be undertaken, which one would you choose and why?

Determine the total NPV if all 3 projects are undertaken.

Project Project 1 Project 2 Project 3 t: 0 1 -100 10 -100 80 -100 30 Cash flows 2 10 40 -10.28 30 30 3 4 5 10 10 100 0 0 30 0 B (beta) 1 0.7 0.5 r (cost of capital) 6 4,65 3,75 NPV 9.38 4 9,54

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