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Elon Musk has asked for your advice. Should he invest $1 billioninto his SpaceX company to develop a Mission to Mars – or should heinvest in a second giant battery factory in Nevada? For these twoprojects, which should he look at, NPV or IRR? In other words,generally speaking, what are their positives and negatives andwhich may be more relevant to his situation? Also, what is WACC andhow should he think about it in terms of financing of theseprojects? At this point, you don’t know what the IRR or NPV or WACCare, but what Musk is asking you is more of a sense of what theseare and how they may be relevant to his way of thinking.
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