International Financial Management: NPV, IRR, and Project Analysis

This document presents a comprehensive solution to an International Financial Management assignment. The solution covers key concepts such as calculating Expected Net Present Value (NPV) and Standard Deviation of NPV, crucial for capital budgeting and project viability assessment. It includes detailed calculations and interpretations for different scenarios. Furthermore, the assignment delves into the analysis of a company's investment in lignite mines, evaluating the project's expected NPV, standard deviation, and the probability of avoiding liquidation. The solution also explores the ranking of projects based on NPV and IRR, comparing their advantages and disadvantages in financial decision-making. Finally, it analyzes the probability of producing a negative NPV under various cash flow scenarios and discounting factors. The document provides a thorough understanding of financial management principles and their practical application in project evaluation and investment analysis.