You are told that using a 15% discount rate the NPV of each of the four models
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Question:
- You are told that using a 15% discount rate the NPV of each of the four models is estimated to be:
San Remo | La Spaziale | Expobar | Astoria | |
---|---|---|---|---|
NPV (r=15%) | -£503 | -£136 | -£339 | -£614 |
Use this information to calculate the internal rate of return (IRR) of the four models. Show your workings.
(6 marks)
- Using the findings above (MCA, NPV and IRR) provide a short report for Mary with your advice on which Espresso model she should choose. Identify the advantages and disadvantages of the three techniques.
Related Book For
Investment Analysis and Portfolio Management
ISBN: 978-0538482387
10th Edition
Authors: Frank K. Reilly, Keith C. Brown
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