Question: this is the all information is given for this question Exercise 1: Basics in Financial Valuation (20 points) Lufthansa AG is comparing the investment into
Exercise 1: Basics in Financial Valuation (20 points) Lufthansa AG is comparing the investment into two aircraft projects by referring to financial valuation techniques. The two projects are normal investments (only one change in sign of the series of payments) and lead to the some Net Present Value by using a discount rate of 10%. Additionally, the two projects are characterized by the data given as follows: Data Aircran A Aircraft Nominal Valve 320 200 Equivalent Annuity -10%) +52.38 -100 Internal Rate of Retum 14.9% 20% a) Give a sketch of the two NPV functions! Please name the achses (7 points) b) Which project will be selected for the discount rates given below? (5 points) Discount Selected price 0% 6% 10% 18% 22% c) Which aircraft project has the longer term? Give arguments! (8 points) Exercise 1: Basics in Financial Valuation (20 points) Lufthansa AG is comparing the investment into two aircraft projects by referring to financial valuation techniques. The two projects are normal investments (only one change in sign of the series of payments) and lead to the some Net Present Value by using a discount rate of 10%. Additionally, the two projects are characterized by the data given as follows: Data Aircran A Aircraft Nominal Valve 320 200 Equivalent Annuity -10%) +52.38 -100 Internal Rate of Retum 14.9% 20% a) Give a sketch of the two NPV functions! Please name the achses (7 points) b) Which project will be selected for the discount rates given below? (5 points) Discount Selected price 0% 6% 10% 18% 22% c) Which aircraft project has the longer term? Give arguments! (8 points)
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