Question
1. The cost of capital for a firm is 15%. Calculate the NPV of the following project. Should the firm invest in this project? Year
1. The cost of capital for a firm is 15%. Calculate the NPV of the following project. Should the firm invest in this project?
| Year | Cash flow |
| 0 | -20,000 |
| 1 | 8,000 |
| 2 | 6,000 |
| 3 | 5,000 |
| 4 | 10,000 |
2. You have the following information on four mutually exclusive projects with an equal life:Which project(s) should you choose?
| Project | NPV | IRR |
| A | $35,000 | 11% |
| B | $20,000 | 20% |
| C | $15,300 | 18% |
| D | $40,000 | 15% |
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The Private Equity Toolkit A Step By Step Guide To Getting Deals Done From Sourcing To Exit
Authors: Tamara Sakovska
1st Edition
1119697107, 978-1119697107
