Instructions

Belgravia Petroleum Inc. is trying to evaluate a generation project with the following cash flows:

Year Cash flow

$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$

The required rate of return is $12\%)$: Calculate

o Modified IRR

$$ The discounting approach

$$ The reinvestment approach

$$ The combination approach

$$ Based on your analysis, should the company take the project? Why?