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Net present value using discounted cash flow method

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Reference no: EM132783253

Requirements: Assume that you have an internship in the finance department of Starbucks Kuwait. The Manager gave you a task to evaluate if a project is profitable or not.

The project has the following details:

Project has an initial cost of $45,000 expected net cash inflows of $20,000 per year for 5 years, and a cost of capital of 6%. Answer the following questions.

A. What valuation methods can you apply in order to make a decision?

B. Calculate the Net Present Value using Discounted Cash flow method.

C. Based on your results decide whether company should invest into this project or not? Please give explanation.

D. Considering nowadays market situation do you think it is a good idea to invest in one more project for Starbucks Kuwait? Explain

E. Today's financial market has changed significantly due to Covid 19. Analyze today's market and provide segments which are better to invest into?

Reference no: EM132783253

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