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Provide an executive summary on the results of the decision rule given these two scenarios with a five- and three-year project life, and revised WACC.

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May 27th, 2023
Home Homework Help Provide an executive summary on the results of the decision rule given these two scenarios with a five- and three-year project life, and revised WACC.

The executive summary analyses the impact on an investment decision rule of revised WACC and project lifecycles. The results were compared using two different scenarios: one with five-years of project life, and the other with a 3-years project life. Results showed that, when WACCs were reduced, decision rules became more favorable for both scenarios. This meant that potential returns on investment would be greater than expected. In addition, a shorter 3-year project duration yielded greater long-term returns than the 5-year scenario. Reduced WACC, and a shorter project life cycle could result in a significant increase of returns to investors.

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