Discuss about total risk and market risk associated with project investments.
The IndiFood restaurant is planning to open a new site in either Durban or Pretoria, and they would like to know which is the most viable option. The company's cost of capital is for each project, and the initial investment is RRm The following estimated cash flows are given:
Pretoria has the following estimated cash flows:
tableYearCash flow,RRRR
Durban has the following estimated cash flows:
tableYearCash flow,RRRR
Calculate the NVP net present value of each project and recommend which project the company should select. present your answer in an NPV table
A company is debating whether to commit to the project of constructing a new warehouse. The cost of the investment is RRm and will results in equal cash flows of RRm for four years. The company's cost of capital is for this project.
Calculate the project's NVP and state if the project should be accepted or not.
Calculate the IRR internal rate of return of this project.
