This document provides a comprehensive analysis of investment projects and portfolio management, including calculations of return on investment, risk assessment, and comparison of different investment options.
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[...] As the network ages, the increase in future costs will lead to a decrease in cash flows over the four-year duration of the project. The HF project, on the other hand, aims to improve the cable distribution network beyond the immediate needs forecast. It foresees an increase in cash flows over time as demand reaches the level of the increased capacity of the offer. Like the previous one, this project has a four-year lifespan, as Mr. Nicos expects a new generation of technological products to replace existing ones. The following estimates include all elements of cash flows expressed in millions. [...]
[...] In our case, the HF and Refit projects are considered independent. In fact, the realization of one of the two projects does not prevent the realization of the other. They could quite well be realized in parallel. This is important in our analysis because it allows us to focus on each project independently, without worrying about the effects that one project may have on another (cannibalism) 3. The calculation of the recovery period indicates from when the project will start generating money. [...]
[...] Exercise The market return expectation is the standard deviation is 25%. The risk-free rate is 7%. The title i is on the efficiency frontier, it has an expectation of what is the standard deviation of returns? What is the correlation with the market? The title j has an expectation of 35% and a standard deviation of 65%. What is the systematic risk and specific risk of this title? Exercise An investor buys 100 shares of A worth $550 each and 75 shares of B at a unit price of $600. [...]
[...] Let's use the VAN criterion: Project HF: Project Refit: According to the NPV method, the projects have a positive NPV and are good investments. However, the NPV of the HF project is 4 times higher than that of the Refit project, making it the best candidate. 5. Let's use the TRI method: The TRI for the HF project is 36.92% The TRI for the Refit project is 25.81% The 2 TRI are higher than the rate of revaluation (cost of capital), which suggests that the 2 projects are feasible, with a preference for the HF project. [...]
[...] Expected Market Return Expected Return of Poussin Stock Market Return Variance Covariance of Poussin/Market Returns Calculation of Beta of Poussin Title 2. Write the MEDAF equation 3. The desired return is 14.157% and is higher than its expected return. Exercise 1. Since the title i is on the efficiency frontier, its standard deviation is the same as that of the market, which is 25% Since the title i is on the efficiency frontier, its correlation is perfect with the market, it is therefore equal to 1. 2. [...]
