Question: You are considering two possible projects (Project A and Project B) that could start immediately. Your boss has indicated that she only wants to select

You are considering two possible projects (Project A and Project B) that could start immediately. Your boss has indicated that she only wants to select one of these projects given the current uncertainties in the global economy, and asked you to evaluate each project and recommend which project you think the company should adopt. You have made the following cash flow forecasts for each project. Project A would require an immediate initial investment of $20M (USD) to begin the project and a second investment of $10M one year from the start of the project. The project would break even in the following year (earning zero profit) but would earn a positive return of $13.5M at the end of its third year and $40M at the end of its fourth year. Project B would require an initial investment of $22.5M but would return a net positive cash flow of $2M, $4M, $8M, $12M, and $17M at the end of years 1 - 5. The CFO estimates that an appropriate annual discount rate is 13 percent based on your company's future projected performance. Given current global politics, the CFO feels that we will have an average inflation rate of three percent over

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