4 Compare and contrast the strengths and weaknesses of the adjusted present value, weighted average cost of capital, and flow to equity approaches to investment appraisal. Which method, in your opinion, is the best? Explain. (25 marks)

Electrolar AB is planning to set up new operations in northern Sweden. Having established that the investment has a positive net present value, it now has to consider its financing decision. The underwriters to the company state that the total funding required amounts to SKr0.5 billion and that this can be raised through a debt issue or an equity issue.