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Vanguard is evaluating new potential investments to add to their internal investment fund. Their current fund composition boasts returns that, on average, exceed the S&P

Vanguard is evaluating new potential investments to add to their internal investment fund. Their current fund composition boasts returns that, on average, exceed the S&P 500 at 8.5%. They take a conservative approach by allowing capital investments to be recovered within a decade following each purchase. Vanguard is considering adding the Hungarian firm, Kimco & company, a new technology firm developing automation software for the automotive industry, to their fund.

Estimated details regarding the Kimco & Co. investment are as follows:

Potential investment

Payback period

Return on investment (ROI)

Net present value (NPV)

Internal rate of Return (IRR)

Kimco & co.

7 years

0.079

0.0

0.085

As an analyst at Vanguard, would you recommend adding Kimco & co. to their international fund? Please use the capital investment evaluation measures discussed in class to justify your answer.

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