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The following is a report on the estimated cash flows for 3 projects set up at 3 different locations. PROJECT Vice City San Andreas Chinatown
The following is a report on the estimated cash flows for 3 projects set up at 3 different locations. PROJECT Vice City San Andreas Chinatown CASH FLOWS t: 0 4 5 1 2 3 -100 10 10 10 10 100 -100 80 40 0 0 -100 30 30 30 30 0 (beta) A 0.7 0.5 r (cost of capital) 6 D E NPV B 4 F Values are in million US$. Annual risk-free rate = 1.5%. Market risk premium = 4.5%. Find the missing values. b. What is the Internal Rate of Return for the Chinatown project? Is it 7.7%, 5.4% or 6.4%? If only one project can be undertaken, which one is it going to be and why? d. Determine the total NPV if all 3 projects are undertaken
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