3-(38 points) You are a financial analyst for CloudSoft Corp. The company is considering three...
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Finance
points You are a financial analyst for CloudSoft Corp. The company is considering three software projects: Project Stratus, Project Cumulus, and Project Cirrus.
Cash Flow Projections in thousands:
Project Stratus year duration:
Year Inflows Outflows
Y
Y
Y
Y
Y
Y
Project Cumulus year duration:
Year Inflows Outflows
Y
Y
Y
Y
Y
Project Cirrus year duration:
Year Inflows Outflows
Y
Y
Y
Y
Y
Y
Y
a Calculate the NPV for each project given a rate of return of
b Rank the projects based on their NPV Which one should CloudSoft Corp. prioritize?
c For Project Stratus and Project Cirrus, determine the year in which each project breaks even based on cumulative net cash flows. Which project has a quicker return on investment?
d How would your recommendation change if the company's required rate of return suddenly increased to Calculate and analyze the new NPVs for each project.
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