Delta Corporation wishes to invest in one of three transport infrastructure projects X, Y and Z with initial outlays of $800 million, $850 million and $930 million respectively. Projects are expected to produce each year free after-tax cash flows of $252 million for project X, project Y is expected to generate $250 million and project Z $290 million. Each project has depreciable lives of 10 years. The required rate of return is 15 percent. a. Use the Net Present Value Technique and determine the most appropriate investment for Delta Corporation. b. State four (4) reasons why Delta Corporation should not use the Payback Technique in order to determine the most viable infrastructure project. c. Describe two (2) factors that impact the demand for rail transport
Delta Corporation wishes to invest in one of three transport infrastructure projects X, Y and Z with initial outlays of $800 million, $850 million and $930 million respectively. Projects are expected to produce each year
a. Use the
b. State four (4) reasons why Delta Corporation should not use the Payback Technique in order to determine the most viable infrastructure project.
c. Describe two (2) factors that impact the demand for rail transport.
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