You are in your 3rd year at HANU, and life has become complicated with numerous

ambitions and a strong focus on the future. The global economy is ensnared in a spiral of inflation,
leading the consumer price index (CPI) to soar to its highest level in the past two decades. All
future prospects appear dim, leaving you uncertain about the trajectory of your personal
development. Nevertheless, the market continually offers opportunities, and money never ceases
to move.
You diligently work as an English tutor every month, earning a salary of 200,000 VND per
tutoring session, conducting three lessons each week. You will continue to receive this income for
another two years, as you are currently a 3rd-year student. (Assume that you will need 5 years to
graduate)
Additionally, you received a sum of 20 million VND from your parents on your last birthday
as a reward for your exceptional grades from the previous year, intended for an iPhone purchase.
However, you are contemplating saving the money your parents gave you in the bank, along with
one-third of your tutoring income each month for the next two years.
1) Calculate the value of the money you will accumulate upon graduating from HANU
(after two years) using the highest deposit rate in Vietnam for a one-month term, currently offered
by SCB at 4% per year.
2) With your savings after two years, and considering the fluctuating world economy, you
have the following plan:
Utilize your entire savings deposit and borrow more from your relatives at an interest rate
of only 5% per year without requiring collateral.
• Maintain a debt-to-total-assets ratio of 35%.
• Aim for a cost of equity of at least 18%.
• Calculate your weighted average cost of capital (WACC) using the formula: WACC
= Wd * Rd * (1-T) + We * Re, taking into account that your tax payments are
included in "Other costs," implying no tax rate for your project.
a) Calculate the total amount available for investment.
b) Plan to use all the money determined in b)1) to establish a street vendor selling bread.
Anticipate the following expenses:
Rental cost VND 2,000,000.00
COGS VND 5,000,000.00
Other costs VND 3,000,000.00
Revenue for the first three months is unstable, representing only 80% of the revenue in the
subsequent months. Starting from the fourth month, expect a steady monthly revenue of 25 million
VND. Calculate the Net Present Value (NPV) and Internal Rate of Return (IRR) for your bakery
project within one year.
3) Still using the same cost of capital, a florist project provides the following cash flow:
VND 15 million per month for the first three months
VND 14 million per month for the subsequent nine months
Based on NPV, decide whether to invest in the bakery project or the florist project,
recognizing that these are two independent projects.
4) Conduct a sensitivity analysis of NPV based on the following criteria:
• Alterations in the weight of debt and weight of equity (increasing by 10%)
• Changes in the cost of debt and cost of equity (incrementing by 2%)