Proposed investment in palladium

Reference no: EM131028189

Investing E100, 000 in addition to raw materials, mostly Palladium, should allow Cryogenic concepts to increase production and earn an additional E112, 000 next year. The payoff could cover the investment, plus 12% return. Palladium is traded in commodity markets. The CFO (Chief Financial Officer) has studied the history of returns from investments in Palladium and believes that investors in the precious metal can reasonably expect a 15% return. What is the opportunity cost of capital? Is Cryogenic's proposed investment in palladium a good idea? Why or why not?

Reference no: EM131028189

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