PROJECT Vice City San Andreas Chinatown t: CASH FLOWS 1 23 -100 10 10 10 10 100 0 4 5 -100 80 40 C 0 0 -100 0 30 30 30 30 B (beta) A 0.7 0.5 r (cost of capital) 6 D E NPV B47 F
PROJECT Vice City San Andreas Chinatown t: CASH FLOWS 1 23 -100 10 10 10 10 100 0 4 5 -100 80 40 C 0 0 -100 0 30 30 30 30 B (beta) A 0.7 0.5 r (cost of capital) 6 D E NPV B47 F
Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows
Section10.4: Internal Rate Of Return (irr)
Problem 2ST
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Question
The following is a report on the estimated cash flows for 3 projects set up at 3 different locations.
Values are in million US$. Annual risk-free rate = 1.5%. Market risk premium = 4.5%.
- Find the missing values.
A:
B:
C:
D:
E:
F
NO using excel
Transcribed Image Text:PROJECT
Vice City
San Andreas
Chinatown
t:
CASH FLOWS
1 2 3
0
4
5
-100 10 10 10 10 100
C 0 0
30 0
-100 80
-100
80 40
30 30 30
B
(beta)
A
0.7
0.5
r (cost of
capital)
6
D
E
NPV
B4F
B
4
F
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I get beta in step 1 to 1,5 since you have to subtract rm - rf which gives 3 (4,5%-1,5%) = 3%
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