evaluate five investment projects

Holmes Institute HC2091 Memo 01 – T01, 2015Mr. de Ville, the owner of Tasman Ian de Ville Holdings Ltd. (TIDH) has askedyou to evaluate five…

Holmes Institute HC2091 Memo 01 – T01, 2015Mr. de Ville, the owner of Tasman Ian de Ville Holdings Ltd. (TIDH) has askedyou to evaluate five investment projects. TIDH has a $10,000,000 investmentbudget, an investment hurdle rate of 11.0 %, and the owner has a requirement thatall investments have a Payback Period (PBP) of under 3.5 years. Also, Project 2brings the offices and warehouse up to the current fire code and the listed savingsare the “facilitation payments” (i.e. bribes) that will no longer need to be made toinspectors to avoid the office being shut-down.

Year end Project 1 Project 2 Project 3 Project 4 Project 501 -$830,000 -$200,000 -$850,000 -$5,000,000 -$350,00002 100,000 350,000 800,000 350,00003 100,000 500,000 800,000 350,00004 100,000 700,000 800,000 350,00005 800,000 -2,650,00006-30 1,000,000 800,000 350,000

Please review the above listed projects by providing NPV, IRR, PBP, B/Cratio anddo not forget social legitimacy needs and select the ones that should be brought tothe attention of the owner for investment consideration.

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