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Corinth has also analysed two other alternative investment projects, details below The forecast total undiscounted cashflows for Project Beta:   T0 T1 T2 T3 T4   £’000 £’000 £’000 £’000 £’000 Sales revenue (W1) (50,000) 11,995 12,455 19,365 2,883

Corinth has also analysed two other alternative investment projects, details below The forecast total undiscounted cashflows for Project Beta:   T0 T1 T2 T3 T4   £’000 £’000 £’000 £’000 £’000 Sales revenue (W1) (50,000) 11,995 12,455 19,365 2,883

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Corinth has also analysed two other alternative investment projects, details below

The forecast total undiscounted cashflows for Project Beta:

 

T0

T1

T2

T3

T4

 

£’000

£’000

£’000

£’000

£’000

Sales revenue (W1)

(50,000)

11,995

12,455

19,365

2,883

 


Project Gamma:
Initial outlay:                          £70 Million
Project life:                            6 years
NPV at 0% discount rate:     +£5 Million
IRR:                                         3% and 14%

 

  1. i) For Project Beta, assuming a positive WACC, comment on the sign (negative, positive or indeterminate) of the NPV for Project Beta and in a single sentence explain your reasoning.
    Also comment on the sign (negative, positive or indeterminate) of the IRR for Project Beta and in a single sentence explain your reasoning
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