Document information
- University
- Politecnico di Milano
- Degree programme
- Mobility Engineering
- Subject
- Finance and Management of Infrastructure Investments
- Classification
- Exam · Full exam
- Content
- Solution only
- Original format
- Text
- Searchable text
← Back
ExamFull examSolution only
Exam Solution July 2023
Study material for Finance and Management of Infrastructure Investments, shared by the Studwiz community and reviewed by moderators.
Finance and Management of Infrastructure InvestmentsFull exam
Document information
What's included in this study material
Study material for Finance and Management of Infrastructure Investments, shared by the Studwiz community and reviewed by moderators.
Import quality: text was extracted directly from the original document.
Extracted content from the document
Representative passages recognised in different parts of the material. The full extracted text remains available to search, while this compact preview makes the page easier to read.
Page 1
Titolo presentazione sottotitolo • Milano, XX mese 20XX Exam FMII – July 2023 Section I – Q1 The following projects are assigned. For both project A and project B compute the following indicators: ▪ Net Present Value; ▪ Payback Time; ▪ Internal Rate of Return. With reference to each single indicator, please, discuss which investment is preferable and motivate the choice. Project A Year 1 Year 2 Year 3 Year 4 Discount Rate Revenues 0.00 € 100 000.00 € 110 000.00 € 70 000.00 € 3% Operating Costs 0.00 € 40 000.00 € 50 000.00 € 60 000.00 € Initial Investment 100 000.00 € Project B Year 1 Year 2 Year 3 Year 4 Discount Rate Revenues 0.00 € 100 000.00 € 130 000.00 € 350 000.00 € 3% Operating Costs 0.00 € 60 000.00 € 80 000.00 € 60 000.00 € Initial Investment -200 000.00 € Section I – Q1 (Solution: Financial Analysis) ▪ NPV: Project B is better since NPV B > NPV A. ▪ PBT: Project A is better since PBT A < PBT B. ▪ IRR: Project B is better since IRR B > IRR A Project A Year 1 Year 2 Year 3 Year 4 Discount Rate Revenues 0.00 € 100 000.00 € 110 000.00 € 70 000.00 € 3% Operating Costs 0.00 € 40 000.00 € 50 000.00 € 60 000.00 € Initial Investment 100 000.00 € CF A -100 000.00 € 60 000.00 € 60 000.00 € 10 000.00 € Discounted Cash Flows -97 087.38 € 56 555.75 € 54 908.50 € 8 884.87 € Cumulated Discounted Cash Flows -97 087.38 € -40 531.62 € 14 376.88 € 23 261.75 € NPV 23 261.75 € PBT year 3 IRR 0.180 Project B Year 1 Year 2 Year 3 Year 4 Discount Rate Revenues 0.00 € 100 000.00 € 130 000.00 € 350 000.00 € 3% Operating Costs 0.00 € 60 000.00 € 80 000.00 € 60 000.00 € Initial Investment 200 000.00 € CF A -200 000.00 € 40 000.00 € 50 000.00 € 290 000.00 € Discounted Cash Flows -194 174.76 € 37 703.84 € 45 757.08 € 257 661.24 € Cumulated Discounted Cash Flows -194 174.76 € -156 470.92 €…
Preview
First page of the document.