Module 2 Mini-Case due Nov 7, 2023 16:05 CAT You are a consulting firm intern and your job is to help a client choose investment projects. Your client, RealEstate, is a young and growing commercial and residential real estate firm. After reading through all the related information of those projects, you have compiled the following cash flow projections: CFO CF1 CF2 CF3 project 1 -100 50 50 50 project 2 project 3 project 4 -80 -70 -60 40 30 30 45 40 40 50 50 60 project 5 -50 25 30 70 CFO denotes the initial investment. CF1 is the cash flow at the end of the first year. CF2 is the cash flow at the end of the second year, and so on. The units are millions of dollars. 1. You were told that the opportunity cost of capital for all these projects is 35%. Which projects should you reject? 2. If Real Estate accepts projects with payback periods of 2 years or less, which project should you reject? 3. 4. Compute the NPV of Project 1. Use cost of capital of 35%. Keep two decimal points Compute the NPV of Project 2. Use cost of capital of 35%. Keep two decimal points 5. Compute the NPV of Project 3. Use cost of capital of 35%. Keep two decimal points 6. Compute the NPV of Project 4. Use cost of capital of 35%. Keep two decimal points 7. Compute the NPV of Project 5. Use cost of capital of 35%. Keep two decimal points 8. Suppose Real Estate has a budget of $150M, recommend the projects it should take 9. If the budget is only $100M, which projects do you take?

Cro denotes the intial imvitment. CrI is the can floes as the end of the frat year. Cr2 ia the cash fow at in end of the second velr, and so en. The unilt are millens of dolian. 1. You were told that the opportunity cost of capital for all these peojects is 35%. Which projects should vou reject? 2. If Bedifstate accepts projects with parback periods of 2 vears or less, which project should you reject? 3. Compute the NPV of Project 1. Use cost of capital of 35\%, Kevp two decimal points 4. Compute the NPV of Project 2 Use cost of capital of 35\%. Keep two decimal points 5. Compute the NPV of Project 3. Une cost of capital of 35\%. Keep two decimal poins 6. Compute the NPV of Project 4. Use cost of capital of 35\%. Keep two decimal points 7. Compute the NPV of Project 5 . Use cost of capital of 35\%. Keep two decimal points. 8. Suppose Realfstate has a budget of $150M, reconmend the projects it should take 9. If the budget is only 5100M, which projects do vou take