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Review the financial data below. The company has narrowed the choice to the following two alternatives, with the following cash flow information being available. Use

  • Review the financial data below. The company has narrowed the choice to the following two alternatives, with the following cash flow information being available.
  • Use the following data in your analysis:

YEAR: 0 1 2 3 4 5

PROPRTY 1 $(000s): -2500 1000 500 600 1000 900

PROPRTY 2 $(000s): -2750 900 700 800 600 600

Note 1:The company's current cost of capital is 10%.

Note 2:Ignore taxation.

explain the tools that you believe would help to reach a decision.

If you were a decision-maker in this organisation, which calculations and measures would you want at your disposal before making your choice?

Are there other, non-financial factors that may play a role in your decision?

what recommendation to the company on which option it should take. Support your decision with an interpretation of any calculations you performed, as well as an explanation of any other factors you considered.

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