Recent Question/Assignment

3 - Memos - 2 pages each
Holmes Institute HI5002 Memo 01 – T01, 2015
Mr. de Ville, the owner of Tasman Ian de Ville Holdings Ltd. (TIDH) has asked you to evaluate five investment projects. TIDH has a $10,000,000 investment budget, an investment hurdle rate of 11.0 %, and the owner has a requirement that all investments have a Payback Period (PBP) of under 3.5 years. Also, Project 2 brings the offices and warehouse up to the current fire code and the listed savings are the “facilitation payments” (i.e. bribes) that will no longer need to be made to inspectors to avoid the office being shut-down.
Year end Project 1 Project 2 Project 3 Project 4 Project 5
01 -$830,000 -$200,000 -$850,000 -$5,000,000 -$350,000
02 100,000 350,000 800,000 350,000
03 100,000 500,000 800,000 350,000
04 100,000 700,000 800,000 350,000
05 800,000 -2,650,000
06-30 1,000,000 800,000 350,000
Please review the above listed projects by providing NPV, IRR, PBP, B/Cratio and do not forget social legitimacy needs and select the ones that should be brought to the attention of the owner for investment consideration.