Question 2
115
PART 2 (Note: Assume projects with an ERRR - the Real Interest Rate will be undertaken.)
Your company faces the following portfolio of investment projects. Evaluate whether your company should engage in each of the following potential investment projects:
able[[Amount Spent],[on Project],[Today's $s]], able[[Expected],[Inflation],[Rate]], able[[Nominal],[Interest],[Rate]], able[[Real],[Interest],[Rate]], able[[Expected],[Revenues],[Today's $s]], able[[Expected],[Real Rate],[of Return]], able[[Should You Do],[the Project (Y/N)]]
Question 2
/15
Your company faces the following portfolio of investment projects. Evaluate whether your company should engage in each of the following potential investment projects: Amount Spent Expected Nominal Real Expected Expected Should You Do on Project Inflation Interest Interest Revenues Real Rate the ProjectY/N (Today's $s) Rate Rate Rate (Today's $s) of Return Project1 $100 mil 5% 15% 1% $111 mil 2% 3 Yes No Project2 $50 mil 5% 15% 4% $60 mil 5% 6 Yes No Project 3 $10 mil 5% 15% 7% $15 mil 8% 9 Yes No Project 4 $200 mil 5% 15% 10% $250 mil 11% 12 Yes No Project 5 $100 mil 5% 15% 13% $105 mil 14% 15 Yes No
Do NOT put a % sign. Also, answer Yes or No where appropriate.