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I have the same calculations for Q1 as amurulez but failed q2 with dividend capacity . How it should be calculated?
Do you remember of how many marks was the last part of Q1 on inherent risk.
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I AGREE, ITS ALL ABOUT GETTING MONEY NOW
@amirulez said:
Honestly, it is not that hard, but i can’t manage to complete it in time. Got blank on third question calculation part due to have one hour left, and still need to write all the writing part. Section 1 took me 2 hour plus.I get 25.462m hedging amount using forward contract, money market hedge is lesser but marginal. Project Alpha NPV is around 5,562 if i remember correctly. And the duration is 2.6years. Forgot the amount for APV.
The dividend capacity i get for question 2 is 80M.
Got very similar throughout, remember the money market being marginally worse in my answer. And Alpha’s NPV being about what you said. I got 3.02 years for its duration, however, I recommended Beta in the end I don’t know about you guys? My logic being that both projects NPV weren’t that far off each other with respect for the amount of money invested, but as I got the 3.02-year duration compared to Beta’s 2.42 years (?) that Beta was lower risk for a similar return. Can’t recall what I got for dividend capacity
got negative for alpha..recommend beta..last question unable to finish..time managment was an issue
Who else considered the fact that the project was to start in 6 months, and we were to present value it today?. that kinda affected my initial outlay
So how will the calculations differ if we were to find the npv of the project starting in 6 months??
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