Question $1$

Corsider the following set of propiects for vatuation:

Poca$-$ired:

UWing $14$ per cort of the cow. of capiad calculate the NPV for each of the propects shown in the

folloing table and ifdoate whether or fot ench is acoboptable.

Question $2$

A project's annual $($operalingl oash fows for the rebt fve years are: R$1\mathrm{.}2$ millon, R$1\mathrm{.}4$ milion,

R$1\mathrm{.}7$ milion, R$2$ milion, and R$2\mathrm{.}5$ milion. Assumirg a dscount rate of $12\%$ and a larmine

growth rite of $45.$

Poog$\_$ired:

What is the terrinal vulue for imsessing the cianh fows ather the fith year?

What is the total value of the cimh foos for the compary?

What properton of the totial cash flow value is dependert on the terrinal vulue?

Question $3$

You are a dractor of chplal acquisisors for Morrirgaide Hotei Compeny. One of the projects

you are del beriding is acruisilon of Morroe Hospially, a compary that owns and operime a

chain of bed$-$and$-$brealfestims. Susan Bharp, Morroels owner, is wiling to sall her compery

to Morringide only if she is ottered an al$-$cesh purchiase price of R$5$ milion. Your project

malysis tham estmiles that the purchime of Monvse Hospitaliy wil ganerale the following

aher$-$tiox marginel cirsh fow:

of debt and equily, at the compery's weighad werage $($ahartley$)$ cost of eapilat of $15$ percent.

Moringabe's lax rete is $30$ percert. Shoud you itcommend acguirng Monise Howplality to

you CEO?