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  • Prerna Basu

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    Prerna Basu
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    This document provides financial information for proposed investments in three industries: airlines, automobiles, and hospitality. It calculates the total funding required, optimal debt-to-equity ratio, total capital costs, and internal rates of return to rank the proposed investments from most to least favorable. The hospitality industry has the highest estimated return at 19%, followed by airlines at 2% and automobiles at 3%.

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    This document provides financial information for proposed investments in three industries: airlines, automobiles, and hospitality. It calculates the total funding required, optimal debt-to-equity ratio, total capital costs, and internal rates of return to rank the proposed investments from most to least favorable. The hospitality industry has the highest estimated return at 19%, followed by airlines at 2% and automobiles at 3%.

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    © All Rights Reserved
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    20 views4 pages

    Prerna Basu

    Uploaded by

    Prerna Basu
    This document provides financial information for proposed investments in three industries: airlines, automobiles, and hospitality. It calculates the total funding required, optimal debt-to-equity ratio, total capital costs, and internal rates of return to rank the proposed investments from most to least favorable. The hospitality industry has the highest estimated return at 19%, followed by airlines at 2% and automobiles at 3%.

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    © All Rights Reserved
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    of 4

    ques.

    I
    ayz is
    z is the courpange

    free reserves a 15 000 euro I. Arlines, Investment


    required -60, 500 crore
    IRR - 2% 2.
    Automobilas: neskrant
    guined - 20 vooer. (RR -3%. 3. Pospitalily
    - mement reprind - 35, over
    IRR - 97.

    PPO = 6%
    Dalt
    a
    bank & 87.
    to debenture & 7%

    let
    (2)
    Poral
    regnind invorberent
    (60 000 + 20,000+
    35000) ar. - 115,000 er.

    rreno

    Toral
    fund to be raised
    a tockach a free. = 115,000 cr- 500 as = 100 vor er

    optimal Debt equily given


    - 2:1
    & debt: Equity

    &
    Thus
    To Total debt.
    Itro
    00
    S

    2 28,333.33 *ttoo, on -28,53333


    •
    Total
    egy

    x
    100
    000
    et
    33, 335 33 ez.
    soep
    total
    equital expetal of
    2, 3 3,19:15
    els anuuna.

    of delt is four voam & and fon debenbuns


    50
    loan

    26, 336 33
    12,466.64%
    e
    step in
    Total
    cost of
    •
    8 y 12,666.645
    & 12, 666chule
    190
    ( fr 12,666.685
    + 12,6
    665"
    - 13,679, 382 +13,853.282
    27, 238,33 h.
    Steper
    Total cost of capital earnemine kenen
    - 27, 232 23 es + 35, 333 33 2 62,566 6598 (262, 566 )
    step & Cost of capital under operakened rern.
    Internal rate of rehando returned of all congan -les &
    Inreshment megmind.
    Bacak Aislines - % * LO,
    Automobiles
    &
    ga

    -
    1200 ez.

    Hospitality = 19 x 3
    6650 s.

    lost of capital under


    operational tenus

    2
    6650 + 1800 +48 to & (60,000 + 2000
    + 35,000
    = 128, 250 es.

    Ranking as per ther return investment

    to Hospitality - Airlines - entourabides

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