Npv and other criteriawaddington international inc has 20, Ask an Expert

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NPV and Other Criteria

Waddington International Inc. has $20 million to invest. It is considering whether to build a new factory in Western Canada. The land and the building will cost $15 million payable today. The machines and equipments will cost another $5 million but payable at the end of the first year. It is expected that the factory will generate cash flow of $3 million per year for the next 15 years. The company's cost of capital is 10%.

(a) Calculate the Net Present Value (NPV) and the internal rate of return (IRR) of the Western Canada project.

(b) Calculate the NPV and PI of each project.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M9523117

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