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Financial Analysis

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Using the case study Pepsico Changchun Joint Venture: Capital Expenditure Analysis (9B00N16):

Construct 2 sets of NPV & IRR analysis on the proposed joint venture: one including the concentrate sales, and the other set without the concentrate sales. Based on the results, what would be your decision on the proposed joint venture?

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Two sets of NPV and IRR analysis on the proposed joint venture, one without concentrate sales and the other with concentrate sales:

We use the discount rate of 13% for the NVP analysis. For the joint venture as a whole the NPV is 90,164 and if we take 57.5% of it we get the NPV applicable to the US Company, this is 51,844. The capital invested is spread over the years and we take the NPV of the investment at 13% and we get ...

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