Question
You were referred to an investment specialist in a real estate company, and the financial manager asked you to study the two available investment projects,
You were referred to an investment specialist in a real estate company, and the financial manager asked you to study the two available investment projects, ie Project A and Project B, and express your opinion on the two projects. The cash flows represent the percentages shown in the following table of the investment volume 0
Project B | Project A | year |
11011= 0 | 11011= 0 | 0 |
35% | 15% | 1 |
40% | 25% | 2 |
24% | 35% | 3 |
12% | 50% | 4 |
1500 +11011= 0 | 1000+11011= 0 | Residual value |
If you know that the required return on the investment (discount rate 10%) 1- What is required to find the net present value of the two projects and express your opinion on the two projects? 2 - Finding the profitability indicator for the two projects? 3- Find the internal rate of return (IRR) for the two projects? 4- Which of the two projects is accepted?
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