Dear Sir,
In the Novoroast plc question (question 1, mock 2, Revision kit), It's mentioned if South American investment goes ahead, it will reduce the after tax net CF by 10% however in the solution when calculating NPV, this reduction is ignored. Please explain why?
Thanks,
DT
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P4 Novoroast Plc
10y ago#1The is explained in the introduction paragraph in the report.
The question says in the first paragraph that because of the new high tariffs Novoroasts products will no longer be competitive. So they will lose the 10% whether or not they invest in the country.
Dear sir,
At the end of project. The increased value of Land and buildings is taken into NPV calculation although there is no sale is mentioned? => This is an unrealised on value of assets (not a cash flow)
Or this is just an assumption that the buildings and land is sold?
3y ago#3Whether or not they sell it, that is the value of it to the business.
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