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QUESTION ONE Base Energy is considering a project in the Volta Basin that is expected to generate US$10 million at the end of each
QUESTION ONE Base Energy is considering a project in the Volta Basin that is expected to generate US$10 million at the end of each year for 5 years. The initial outlay is US$25 million. A nominal discount rate of 9.2 % is the appropriate for the risk level. Inflation is 5%. As the firm's financial Analyst, CFO asked you to calculate the following: (1) Net Present Value (NPV), (2) Profitability Index (PI), (3) Pay Back Period (4) IRR (5) For each of your calculation provide offer senior management a decision rule.
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