Question
FNCE 623 Financial Management Individual assignment Belgravia Petroleum Inc. is trying to evaluate a generation project with the following cash flows: Year Cashflow 0 -$300,000,000
FNCE 623 Financial Management
Individual assignment
Belgravia Petroleum Inc. is trying to evaluate a generation project with the following cash flows:
| Year | Cashflow |
| 0 | -$300,000,000 |
| 1 | $63,000,000 |
| 2 | $85,000,000 |
| 3 | -$50,000,000 |
| 4 | $145,000,000 |
| 5 | $175,000,000 |
| 6 | -$50,000,000 |
| 7 | $70,000,000 |
| 8 | $72,000,000 |
Construct a spreadsheet and calculate the following (the required rate of return is 12%):
Payback period
Discounted payback period
Internal rate of return (IRR)
Modified IRR
The discounting approach
The reinvestment approach
The combination approach
Net present value (NPV)
Based on your analysis, should the company take the project? Why? calculate and give reason why to choose or why not to
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Stocks Bonds And The Investment Horizon
Authors: Haim Levy
1st Edition
9811250146, 978-9811250149
