TASK

You are the assistant to Simone Nain  who is the CEO and board member of  Simplicity, a small  private company making a single product and mainly owned by the Nain family that has no diversified assets. Nain is aware that some family board members are ignorant of how capital decisions are made and has asked you to provide a short note (approximately 1000 words) on this matter using the broad headings:

* How does the decision to invest in a project at Simplicity depend on the “discount rate”?

*Which procedure(s) are best for evaluating capital projects at Simplicity?

* Which principle should underlie the choice of a  discount rate for Simplicity?