Question
The CEO of HuaWa Company is considering a five-year investment project of setting up a production factory in Shezhen of China for manufacturing 5G (5
The CEO of HuaWa Company is considering a five-year investment project of setting up a production factory in Shezhen of China for manufacturing 5G (5th Generation) mobile phones. You are a financial manager of the company. Under this current situation of China, explain to the CEO the major considerations and problems associated in the estimation of cashflow of this project. The CEO knows that there are (Internal Rate of Return) IRR and (Net Present Value) NPV methods to evaluate the project. When would it be better to use IRR rather than NPV method to examine the acceptability of the project in this case? The CEO also asks you if it is possible to have a positive initial cash flow at the beginning of the project. Respond also to this question of CEO and illustrate your explanation with example(s). (limit your answer to 450 words
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