Raul Mateus case study week six

# Raul Mateus case study week six - Raul Mateus Finance Case...

• Lab Report
• 1

This preview shows page 1. Sign up to view the full content.

Raul Mateus Finance Case Study 1. a) Payback period: After 4 years, \$584M will be recovered. After 5 years, \$794M will be. Therefore, the payback will during the fifth year. (\$650M-\$584M)/(\$794M-\$584M) = 0.314. 4.314 years b) IRR: between 13.25% and 13.3%: 13.253% c) R = 12% (given). NPV = -\$650M + \$80M/(1.12) + \$121M/(1.12)2 + \$162M/(1.12)3 + \$221M/ (1.12)4 +
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: \$210M/(1.12)5 + \$154M/(1.12)6 + \$108M/(1.12)7 + \$86M/(1.12)8 - \$72M/ (1.12)9 = \$28,451,509.51. d) PI = (NPV – CF0) / CF0 = (\$28,451,509.51 + \$650M) / \$650M = 1.04 2. Based on my analysis I would say yes because the NPV indicates that, given the company’s 12% required return, the cash flows will yield a net positive result....
View Full Document

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern