A firm has to choose between three possible investment projects and the details of each project are as follows: Capital Cost (Initial capital outflow)

Pula

Project A 35 000 Project B 95 000 Project C 75 500

Net cash inflow

Pula

Project A Project B Project C Year 1 7550 15000 5500 Year 2 12550 25000 7550 Year 3 12550 35000 25500 Year 4 15000 35000 35000 Year 5 7550 15500 25000

Calculate the payback period for each project and advise the company on which investment to take. Question 4

BIU.ENTRE.FC.FA.01 Issue 1

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Effective date: 01-04-2019 a) Use Microsoft Excel to calculate the NPV of the cash flows for Project A, B, and C in Question 3 above. Based on your answers, state the project you would recommend to the company as the best investment option while stating your reasons. b) Use Microsoft Excel to calculate the IRR of Project A, B, and C in Question 3 above. Based on your answers, state the project you would recommend to the company as the best investment option while stating your reasons. Question 5 An investor is considering starting a business on juice making. Below are their estimates: Units sold 10 000 Price per unit P15 Cost per unit P8 Total expenses P5 600 Tax rate 15%

Create a Microsoft Excel worksheet and use this information to calculate: a) Revenue b) Cost of goods Sold c) Gross Profit d) Earnings Before Tax e) Taxes f) Net Income (Loss) Question 6 a) Using the Solver function in Microsoft Excel, calculate the units that should be sold and the price to achieve a net income of P70 000 provided the following two constraints: A. The units sold cannot exceed 12 300 B. The price cannot exceed P13

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Effective date: 01-04-2019 b) Using the What if Analysis function in Microsoft Excel, perform a sensitive analysis using the information provided in Question 5. Use multiples of 2 000 for the units sold starting from 4 000 and ending at 16 000; and use multiples of one (1) for the price starting from P9 to P17. NOTE This assignment will contribute towards the final coursework assessment. Two files should be submitted, a Word Document and an Excel Work Book containing all the relevant worksheets (appropriately named) for Question 4 to Question 6.