1. Assume in appraising a 10.000,000 investment project, a firm uses a discount rate of 13%. The equipment is expected to produce a cash inflow (net of operating costs) of 350,000 per year, over a five-year period. At the end of the five years, the firm expects to sell the equipment for 200,000. Calculate the Net Present Value of the project and advice the firm whether or not this project Is viable?
2. Advice a small business on instruments they can utilize in the money and capital market.