TFIN603 - The Current Price Of Ordinary And Systematic & Unsystematic Risk - Finance Assignment Help

Assignment Task -

Part A: 

Question 1

a. Whatisthe currentpriceofordinary / commonsharesin Afterpay Limited and Zip Co Limited?How has each evolved over the past 5-years? Graph each series and discuss their evolution, noting the  salient points. 

b. Define Systematic and unsystematic risk, relative to Afterpay and Zip. Identify at least one factor  (e.g. item of news) that has affected the systematic risk of the institution in the last five years and  reflected in the movement its share price. Which share price was more volatile, Afterpay or Zip  Co.?

Question 2  

a. Which project should Environ Ltd accept? Use the net present value (NPV) criterion to evaluate  both projects. Explain in detail, including all calculations. Also, clearly state all your assumptions. 

b. Determine the IRR for each project. According to the IRR, which project should be accepted?  Explain in detail, including all calculations.

c. Would your conclusions in parts (a) and (b) change if the required rate of return increased to  14%? Explain in detail, including all calculations.

Question 3  

Environ Ltd has revised its estimates of expected after-tax cash flows as shown in Table 2. The initial  outlays are $800,000 for the landfill and $250, 000 for the borehole. Environ Ltd maintains the required  rate of return at 12% for both projects. 

a. Based on the net present value (NPV) criterion, which project should Environ Ltd accept? Explain  in detail, including all calculations. Also, clearly state all your assumptions.

b. Based on the internal rate of return (IRR) criterion, which project should Environ Ltd accept?  Explain in detail, with the graph of IRR and all working steps. Also, clearly state all your  assumptions.

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