1) Task: You are given $10,000 capital budget and your firm has shortlisted ten potential investment projects (see attached case) for you to construct a portfolio. The constraints and requirements are as follows:

State your investment objective clearly on how to balance risk and return in your portfolio (e.g., balancing high risk project with low risk projects)

Note: Projects 7 and 8 are mutually exclusive

You cannot invest in a fraction of a project.

All projects are replicable i.e., you have the option to re-invest in the same project again with the same cashflow stream.

K = 10%

2) Calculate NPV, IRR, and Payback of all 8 project

3) Clearly state your investment objectives. E.g., get invested money back as

early as possible; maximize firms value with new projects; avoid potential

losses etc. (max 50 Words)

4) List of Projects for your portfolio explain how your portfolio will meet

your stated investment objectives (max 50 Words)

350 330 330 EXHIBIT 1 | Projects' Free Cash Flows (dollars in thousands) Project number: 2 3 Initial Investment $(2,000) (2,000 $2,000) $12,000) $(2,000) s(2,000) $(2.000) $2,000) Year $ 330 $1,666 $ 160 $ 280 $2,200 $1,200 $ (350) 330 334 200 280 900 (60) 330 165 350 280 300 60 395 280 90 432 280 70 700 330 440" 280 1,200 330 442 280 $2,250 $1,000 444 280 446 280 10 448 280 11 450 280 12 451 280 13 451 280 14 452 280 15 $10,000 $12,000) $280 Sum of cash flow benefits $3,310 $2,165 $10,000 $3,561 $4,200 $ 2,200 Excess of cash flow $2,580 $4.150 over Inital investment $1,310 $165 $8,000 $1,581 $2,200 $ 200 $ 560 $2,150 Indicatos your in which payback was accomplished. 350 330 330 EXHIBIT 1 | Projects' Free Cash Flows (dollars in thousands) Project number: 2 3 Initial Investment $(2,000) (2,000 $2,000) $12,000) $(2,000) s(2,000) $(2.000) $2,000) Year $ 330 $1,666 $ 160 $ 280 $2,200 $1,200 $ (350) 330 334 200 280 900 (60) 330 165 350 280 300 60 395 280 90 432 280 70 700 330 440" 280 1,200 330 442 280 $2,250 $1,000 444 280 446 280 10 448 280 11 450 280 12 451 280 13 451 280 14 452 280 15 $10,000 $12,000) $280 Sum of cash flow benefits $3,310 $2,165 $10,000 $3,561 $4,200 $ 2,200 Excess of cash flow $2,580 $4.150 over Inital investment $1,310 $165 $8,000 $1,581 $2,200 $ 200 $ 560 $2,150 Indicatos your in which payback was accomplished