Trilever is planning to establish a new factory overseas. The project requires an initial investment of $15

Question:

Trilever is planning to establish a new factory overseas. The project requires an initial investment of $15 million. Management intends to run this factory for six years and then sell it to a local entity. Trilever's finance department has estimated the following yearly cash flows:
Year.............................. Cash Flow ($)
0.............................. −15,000,000
1.............................. 4,000,000
2 .............................. 4,000,000
3 .............................. 4,000,000
4 .............................. 4,000,000
5 .............................. 4,000,000
6 .............................. 7,000,000
Trilever's CFO decides that the company's of 19 percent is an appropriate hurdle rate for this project.
A. Calculate the of this project.
B. Make a recommendation to the CFO concerning whether to undertake this project.
Internal Rate of Return
Internal Rate of Return of IRR is a capital budgeting tool that is used to assess the viability of an investment opportunity. IRR is the true rate of return that a project is capable of generating. It is a metric that tells you about the investment... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...