# Pappy's Potato: Calculating Project Cash Flows and NPV for your portfolio

Calculating Project Cash Flows and NPV - See attached file.

If your portfolio is invested 30 percent each in A and B and 40 percent in C, what is the portfolio's expected return? The variance? The standard deviation?

b. If the expected T-bill rate is 4.25 percent, what is the expected risk premium on the portfolio?

c. If the expected inflation rate is 3 percent, what is the expected real return on the portfolio? What is the expected real risk premium on the portfolio?

Â© BrainMass Inc. brainmass.com December 24, 2021, 4:45 pm ad1c9bdddfhttps://brainmass.com/business/net-present-value/pappy-s-potato-calculating-project-cash-flows-and-npv-for-your-portfolio-5323

#### Solution Preview

See attached Excel attached.

4. Calculating Project Cash Flows and NPV.

Pappy's Potato has come up with a new product, the Pet Potato (they are freeze-dried to last longer). Pappy's paid $120,000 for a marketing survey to determine the viability of the product. It is felt that Pet Potato will generate sales of $270,000 per year. The fixed costs associated with this will be $115,000 per year, and variable costs will amount to 30 percent of sales. The equipment necessary for ...

#### Solution Summary

The explanations in both Word and Excel are clear and concise with respect to the problem questions of risk and return.