Determine the risk adjusted Net Present Value of the following Projects: - ParticularsProject AProject BProject CNet Cash Outlays (Rs)100,000.00120,000.00210,000.00Project Life5 Years5 Years5 YearsAnnual Cash Inflow (Rs)30,000.0042,000.0070,000.00Coefficient of Variation0.400.801.2 The company selects the risk-adjusted rate of discount on the basis of the coefficient of variation. Coefficient of VariationRisk Adjusted Rate of DiscountPresent Value factor 1 to 5 years at risk adjusted rate of discount0.010 %3.7910.412 %3.6050.814 %3.4331.216 %3.2741.618 %3.1272.022 %2.864More than 2.025 %2.689

Project A risk adjusted rate of return = 12% Project B risk adjusted rate of return = 14% Project C…

Answered: Determine the risk adjusted Net Present…

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter16: Country Risk Analysis

Section: Chapter Questions

Problem 20QA

See similar textbooks

Related questions

Concept explainers

Question

Determine the risk adjusted Net Present Value of the following Projects: -

Particulars	Project A	Project B	Project C
Net Cash Outlays (Rs)	100,000.00	120,000.00	210,000.00
Project Life	5 Years	5 Years	5 Years
Annual Cash Inflow (Rs)	30,000.00	42,000.00	70,000.00
Coefficient of Variation	0.40	0.80	1.2

The company selects the risk-adjusted rate of discount on the basis of the coefficient of variation.

Coefficient of Variation	Risk Adjusted Rate of Discount	Present Value factor 1 to 5 years at risk adjusted rate of discount
0.0	10 %	3.791
0.4	12 %	3.605
0.8	14 %	3.433
1.2	16 %	3.274
1.6	18 %	3.127
2.0	22 %	2.864
More than 2.0	25 %	2.689

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions