Net present value of the project

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1. You are tasked to evaluate a certain project will cost P9,500 and will earn cash inflows, after tax, of P3,000 for four years with a minimum desired rate of return of 8%. Should the firm pursue this project? Explain your answer using the net present value of the project?

2. A company has a policy setting its minimum desired rate of return at 12%. If a project with an initial capital of P10,500 and expected annual cash flow of P2,800 for five period. As finance manager, will you advise the firm to pursue with this project? Support your answer with the exact IRR.

3. A firm entered into an agreement with a foreign investor to receive an endowment which provides you with P500,000 per year, forever. How much should that foreign entity set aside if the interest rate is 8% for all future time period.

Reference no: EM133110909

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