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What is the objective of project risk analysis

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Reference no: EM132999649

Question - Gabby PLC has an investment opportunity as follows:

Initial investment $45,000

After-tax cash flow

Y1 14000

Y2 14000

Y3 10000

Y4 10000

Y5 8000

Discount rate = 8%

Required -

a) Calculate the NPV and explain your decision on this project based on the shareholder point of view.

b) What is the objective of project risk analysis, and why is it critical to the investment decision-making process?

c) Damian Taylor aims to accumulate $2,000,000 for his retirement and he has another 35 years for his retirement. He selected a super fund that earns a 4% return annually. Calculate the amount which Damian must have to invest today. If he can switch to another fund, which gives a 14% annual return, calculate how soon he can enjoy his retirement life.

Reference no: EM132999649

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