What is the value of the embedded flexibility for gmr

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Reference no: EM133379045

Question: Considering the primary lease period of 30 years, which airport should GMR invest in?

Use simplediscounted cash flow analysis techniques such as NPV, IRR, and modified IRR for your calculations.

b. Would your decision change if GMR exercised its option to operate the chosen airport for a secondterm of 30 years?

c. Apart from the basic financial analysis, what other factors would you consider to evaluate the airports?

d. Given the capital investment for the construction of a new terminal at IGIA, what is the value of the embedded flexibility for GMR, due to the revised passenger traflic forecast in case Exhibit 5? Would that change your decision?

e. Given the capital investment for the construction of a new terminal at IGIA, Rao asks his team to estimate the value of expanding with the following conservative passenger traflic forecast. Would thatchange your decision?

Reference no: EM133379045

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