How much needs the discount rate

Assignment Help Corporate Finance
Reference no: EM131032648

An area is designated for a large re-wilding project and we need to evaluate the net social value of this project. 7 persons derive benefit from this project: In the table below the annual valuation these persons' benefit from the re-wiling is stated:

Person

Anne

Britt

Claus

Done

Erik

Frank

Gitte

TWTP per year

20

35

40

34

30

20

40

There are two types of costs:

- Costs from establishing the area, and buying and transporting the animals: 1000 (only once)
- Maintenance costs: 100 per year

Exercise 1: Calculate the NPV of the project when the time frame is 10 years and argue whether the project should be undertaken. Use a discount rate of 5 %

Exercise 2: How much needs the discount rate be in order for the NPV to be zero

Consider now that we expect that the TWTP for each person increases by 2 % each year because that re-wiling project slowly also produces higher biodiversity and so on.

Exercise 3 : Recalculate the NPV of the project and comment on the changes this makes

Exercise 4: Will your decision from exercise 3.1 change if 20 years instead of 10 years? (Assume again no increase in WTP over time)

Exercise 5: Discus the concept / idea of discounting (take the above results as point of departure for your discussion)

I need this small Question to solve. This is very basic task. If u calculate by excel it will take few time for you.

Reference no: EM131032648

Questions Cloud

Is it significant for a school bus to arrive late : Assume that a study of 500 randomly selected school bus routes showed that 480 arrived on time. Is it "significant" for a school bus to arrive late?
What are the implications for corporate citizenship strategy : Second, what conclusions can you draw regarding the proposition that corporate responsibility and citizenship programs not only advance communities and protect the environment, but deliver benefits to business as well? Also, what are the implicati..
Write a six pages argument sythesis essay about technology : Write a 6 pages Argument sythesis essay about Technology. How mobile phones interfere with face-to-face relationships. Will upload sources that should be used.
How did the given incident affect amys friends and family : How could prevention efforts assist in this situation? How did this incident affect Amy's friends and family? If you were a Social Worker, how might you assist Amy and/or her friends and family?
How much needs the discount rate : Calculate the NPV of the project when the time frame is 10 years and argue whether the project should be undertaken. Use a discount rate of 5%
Explain the three-system memory theory : Examine the three major types of consequences that result from stress: direct physiological effects; harmful behaviors, and indirect-health related behaviors. Discuss a stressor you've encountered and apply it to each consequence. Discuss the curr..
How twelfth night play with conventions of theatrical comedy : How does Twelfth Night play with the conventions of theatrical comedy? How the play was initially received? Where was it first performed? What does that say about its purpose?
Describe the main methods used to reduce the risks : Describe the main methods used to reduce the risks to health & safety when building the superstructure. Include the main H&S regulations that apply in this case
Applications of private and public key cryptography : Explain why GPG encryption and decryption are quite fast - Create a file of close to 1 MB size and encrypt and decrypt it and note the time taken. Comment on the reason why this much time has taken.

Reviews

Write a Review

Corporate Finance Questions & Answers

  Impact of the global economic crisis on business environment

This paper reviews the article of ‘the impact of the global economic crisis on the business environment' that is written by Roman & Sargu (2011).

  Explain the short and the long-run effects on real output

Explain the short and the long-run effects on real output, price, and unemployment

  Examine the requirements for measuring assets

Examine the needs for measuring assets at fair value in accounting standards

  Financial analysis report driven by rigorous ratio analysis

Financial analysis report driven by rigorous ratio analysis

  Calculate the value of the merged company

Calculate the value of the merged company, the gains (losses) to each group of shareholders, NPV of the deal under different payment methods. Synergy remains the same regardless of payment method.

  Stock market project

Select five companies for the purpose of tracking the stock market, preparing research on the companies, and preparing company reports.

  Write paper on financial analysis and business analysis

Write paper on financial analysis and business analysis

  Intermediate finance

Presence of the taxes increase or decrease the value of the firm

  Average price-earnings ratio

What is the value per share of the company's stock

  Determine the financial consequences

Show by calculation the net present value for the three alternatives (no education, network design certification, mba). Also, according to NPV suggest which alternative you advise your friend to choose

  Prepare a spread sheet model

Prepare a spread sheet model for the client that determines NPV/IRR with and without tax.

  Principles and tools for financial decision-making

Principles and tools for financial decision-making. Analyse the concept of corporate capital structure and compute cost of capital.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd