(a) ABC Ltd. is considering investing in a 2-year project which is expected to generate the following year-end cash flows: C1 = $110 million, C2 = $115 million. The yearly discount rate for the project is 10%. The initial cost of the project is $200 million. (i) Compute the Profit (Revenue – Cost) and NPV of the project. (ii) Based on the answer of part (a), shou
(a) ABC Ltd. is considering investing in a 2-year project which is expected to generate the following year-end cash flows: C1 = $110 million, C2 = $115 million. The yearly discount rate for the project is 10%. The initial cost of the project is $200 million.
(i) Compute the Profit (Revenue – Cost) and NPV of the project.
(ii) Based on the answer of part (a), should the project be accepted? Explain.
(b) John has just purchased an apartment at a price of $5,000,000. He made a down-payment of $2,000,000 and financed the remaining with a 30-year mortgage at 12% per annum, compounded monthly.
(a) Determine the size of the fixed month-end payments.
(b) Calculate the interest payment and the amount of principal paid in the 121st loan repayment.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
