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I’m having a trouble on a P4 question and don’t know which chapter it relates to.
Please help me if you can!
Thank you!!Background
Your family purchased $50,000 of ordinary shares in Tiger Resources on 31 December 2012 at a share price of 28 cents each but reluctantly decided to sell them at 31 December 2016. Your family want to understand the lessons that can be learned from making this investment, and as a promising student they have asked you to explain the following:Tiger Resources Ltd made an announcement (see Assignment 2 resources for this subject on Cloud Deakin) on 9 January 2013 about an overseas copper project (KIPOI). The announcement refers to NPV, IRR and a discount rate and that this project ‘should add significant value to our shareholders”.
Set up a simple model in an excel spreadsheet and using relevant information from that announcement, estimate the annual cash inflows / outflows from this project over its duration and make an assessment of how the project’s IRR of 44% and after tax NPV of $378m was calculated.
Show workings, state assumptions and provide a written summary of your results
from the excel model
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