1. Using NPV, I need to conduct a straight financial analysis of the investment alternatives and rank the projects. Which NPV of the three should I use? Why? Help me suggest a way to evaluate the Effluent project.
2. What aspects of the projects might invalidate the rankings derived? How should I correct for each investment's time value of money, unequal lifetimes, riskiness, and size?
3. What elements of the projects might I assume pose a greater or lesser riskiness? Are they any synergies or conflicts between the projects that I should point out? Do any of these projects have any nonquantitative benefits or costs that I should considered in the evaluation?
4. Based on all of the above, would projects should I recommend?© BrainMass Inc. brainmass.com March 21, 2019, 4:11 pm ad1c9bdddf
Please find the file attached.
As you know, BrainMass is not an assignment-completion service. This response is meant to assist you in tackling your questions and to help you learn the material needed to understand the problems.
Pan Europa Foods
1. Using NPV, conduct a straight financial analysis of the investment alternatives and rank the projects. Which NPV of the three to be used? Why? Suggest a way to evaluate the effluent project.
Following shows the ranking as per NPV at WACC rate of 10.5%
Project NPV @ WACC Rank
11 47.97 1
7 11.99 2
8 9 3
9 8.95 4
4 5.21 5
10 1.16 6
3 0.28 7
2 0 8
5 -0.87 9
1 -1.92 10
6 -4 no information so NPV considered as initial outlay
The best method is to rank the projects according to IRR. The funds must be allocated considering the highest IRR. The following would be the ranking if IRR is taken into ...
Full analysis and all answers