Project Financial Management

Running head: PROJECT FINANCIAL MANAGEMENT
Project Financial Management
Name of the Student:
Name of the University:
Author’s Note:

1PROJECT FINANCIAL MANAGEMENT
Table of Contents
Section A:........................................................................................................................................2
Answer to question 1:..................................................................................................................2
Section B:.........................................................................................................................................6
Answer to question 2:..................................................................................................................6
Answer to question 3:..................................................................................................................7
Answer to question 4:..................................................................................................................9
References and bibliography:........................................................................................................11

2PROJECT FINANCIAL MANAGEMENT
Section A:
Answer to question 1:
In the given case study, the company has three alternative expansion options having the
life of 3 years, 4 years and 5 years respectively with different amount of investment. Each such
expansion option is having different cash inflows and outflows. Based on such information and
market rate of return, and applying some of the discounted and non-discounted techniques, such
investment options can be analyzed and a conscious decision can be made for selection of the
investment option. In this case study, Net present value, Internal rate of return and payback
period of each of the expansion project have been computed and compared with the cost of
capital to achieve at an optimal decision.

3PROJECT FINANCIAL MANAGEMENT
It can be observed from the above analysis that, there is a positive NPV as well as the
internal rate of return is more than the cost of capital, and the payback period for the project is
2.48 years.