Qs. 2 Think about a small project, which one would like to implement in department. It could either be a fresh idea or an expansion of an already existing project. This project should aim at maximizing the returns out of the investment, which you would make.

Briefly highlight the Project

Identify the cash flows for the project in terms of revenues and expenses. Write the rationale for these cash flows. (Both inflows and outflows)

Tenure for the project should be between 5 -8 years.

Determine the cost of capital for the project.

Compute IRR, NPV and Payback Period of the project over a life of the project. Suggest if the project should be accepted. Give reasons for the same.