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1) Your company has identified a potentially profitable investment opportunity. An initial investment of 6,000 is required to undertake the project. The project is expected

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1) Your company has identified a potentially profitable investment opportunity. An initial investment of 6,000 is required to undertake the project. The project is expected to generate a cash flow of 8,000 at the end of its one-year life span. The company uses a 7% required rate of return to value similar projects. Calculate the net present value of this project. (4 marks) 2) As a financial analyst with KPC plc., you have been asked to calculate the share price for a right issue. The following information is available to aid your calculation. The current share price is 14. The company is considering a 1 for 6 rights issue at 10. (4 marks) 3) The initial investment required for a project to be executed by your company is 600,000. The cash flows for the project for the next three years are estimated to be 140,000; 300,000 and 400,000. You are required to calculate the payback period for this project. (4 marks) 4) GPack plc. recently announced an ordinary dividend per share of 26p. The dividend payout per share for 2017-2020 are 20p, 22p, 22p and 24p respectively. The shareholders require a return of 14 per cent. Calculate the price for this share. (4 marks)

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