Question
Question is asking to modify and extend the python code so that the codes will computer net present values of investment projects: project A, B,
Question is asking to modify and extend the python code so that the codes will computer net present values of investment projects: project A, B, C, and D. Your task is to value each of the projects, based on the expected product sales from each project, the term structure of interest rates, and the project lifetime. After each project is valued, you must then rank them in terms of most to least desirable (in this exercise, that means ranking the projects on the basis of greatest NPV (first choice), second greatest NPV (second choice), etc. To get this ranking you must compute the net present value (NPV) of each project.The coupons coorespond to cashflows for each project and intitial investement of each porject is also listed.
NOTE: The up-front investment is modeled as a NEGATIVE CASH FLOW at time t = 0. Thus, the up-front investment is not discounted back from the future. Instead, we arrive at the final (cumulative) NPV by subtracting the up-front investment from the NPV of all cashflows generated by the project. That final (cumulative) NPV is the dollar figure upon which the final rankings and investment recommendations will be made.
Below is the start up code:- (python)
term_struct = [0.015, 0.0175, 0.0225, 0.025, 0.0325, 0.0275, 0.0225, 0.0295, 0.0235, 0.0295, 0.0375, 0.0375, 0.0425, 0.045] project = 'A' coupons = [0, 0, 0, 0, 100000, 250000, 750000, 900000, 500000, 500000, 100000, 100000, 75000, 35000]
initial_investment_A = 1400000
project = 'B' coupons = [0, 0, 250000, 275000, 275000, 275000, 300000, 300000, 215000, 150000,0, 0, 0, 0]
initial_investment_B = 650000
project = 'C' coupons = [50000, 125000, 125000, 125000, 125000, 150000, 150000, 195000, 195000, 200000, 100000, 50000, 25000, 10000]
initial_investment_C = 295000
project = 'D' coupons = [750000, 600000, 500000, 75000, 15000, 0, 0, 0,0, 0,0,0,0,0]
initial_investment_D = 350000
face_value = ###### INSERT YOUR CODE HERE ######## NPV = ###### INSERT CODE HERE ######## left_boundary = ###### INSERT CODE HERE ######## for t in range(-1,left_boundary,-1): factor = 1.0 for term in range(t,left_boundary,-1): factor ###### INSERT CODE HERE ######## NPV ###### INSERT CODE HERE ######## NPV = ###### INSERT CODE HERE ######## print('NPV of project ',project,' is: ',round(NPV,2))
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