Company “Greek Inter-Logistics MTS” can choose among different projects A, B and C. The relevant cash flows are estimated (inflows as well as initial investment) of each project as in the next table (figures are in euro): Year A B C 0 -22,000 -38,000 -14,000 1 8,000 9,000 5,000 2 10,000 16,000 6,000 3 9,000 15,000 5,000 4 2,000 8,000 4,000 Cost of capital for “Greek Inter-Logistics MTS” is 10%. You are asked to: a. Calculate Net Present Value and Internal Rate of Return for each project. Demonstrate your calculations. (10%) b. Classify each investment according to each of the aforementioned two criteria (NPV and IRR). (5%) c. Which investments according to your opinion should the company undertake if it had 40,000€ as available funds for investment? (5%)
Company “Greek Inter-Logistics MTS” can choose among different projects A, B and
C. The relevant
each project as in the next table (figures are in euro):
Year A B C
0 -22,000 -38,000 -14,000
1 8,000 9,000 5,000
2 10,000 16,000 6,000
3 9,000 15,000 5,000
4 2,000 8,000 4,000
Cost of capital for “Greek Inter-Logistics MTS” is 10%.
You are asked to:
a. Calculate
Demonstrate your calculations. (10%)
b. Classify each investment according to each of the aforementioned two criteria
(NPV and IRR). (5%)
c. Which investments according to your opinion should the company undertake if it
had 40,000€ as available funds for investment? (5%)
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