Ch16 p.17 in the paragraph just above "Scenario 1" it states the following: "The company estimates that the project will give a return of 12% on the capital raised ....." My question is whether this is a given statement that forms part of the question or should I be able to calculate this? And if it was calculated, how to do it? Thank you!
It is given to you in this example. You could not calculate it from the information provided. If you were undertaking such a project you could calculate this using an IRR, for example, as discussed in the project appraisal chapters of the course.
