... this would represent minimum required rate for the project. The cost of capital of 10% was likewise used as benchmark since this represents the opportunity cost of reinvesting the additional funds to IPP. These benchmark rates are then adjusted for additional risk premium identified to the project, if there is any. o Strength of the company's cash position in terms of its ability to engage in short-term real estate investments and the company's liquidity requirements. III. Analysis: The projects under the IPP main plant and the Complex Casting Division were evaluated on the basis of a 10% rate of return. We feel that the said rate is a sufficient rate of return for the projects, and do not see any need to add a premium to the rate because the cash flows related to the said projects are not that risky. For example, the fact that there is already a backlog ...

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