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You are working in a private equity firm. Your supervisor asks you to evaluate two independent projects. Project X is an investment in a real
- You are working in a private equity firm. Your supervisor asks you to evaluate two independent projects. Project X is an investment in a real estate agency, while project Z is an investment in a tuition centre. Their projected cash flows are shown below. What is their IRR, NPV, Payback period and Discounted payback for the two projects? Assume that the interest rate is 12%. No formula is needed for this question.
| Project | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 |
| X | -$60,000 | $20,000 | $25,000 + 8 x $1,000 | $65,000 | $20,000 | $10,000 | $5,000 |
| Z | -$20,000 | $6,000 | $16,000 | $15,000 | $15,000 | $25,000 | $20,000 |
- Based on your understanding on the current economic environment (you can focus in Hong Kong or worldwide) and your answer in part (a), draft a pitch to your supervisor on the choice you made.
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Ouch What You Dont Know About Money And Why It Matters More Than You Think
Authors: Paul Knott
1st Edition
0133527077,0273788752
