Question
An investment project requires an initial investment of P 43,000 and will produce an annual revenue of P 10,000 over its five years' life. Use
An investment project requires an initial investment of P 43,000 and will produce an annual
revenue of P 10,000 over its five years' life. Use the
i. Present Worth method to decide whether the investment is worthwhile if the prevailing
[5 marks]
market rate is 6% compounded annually. ii. Is your decision the same if the prevailing market rate is 5% compounded annually?
15 marks]
Internal rate of return (IRR) method to decide whether the investment is worthwhile if the prevailing market rate is 5% compounded annually.
15 marks]
D. An investment project requires an initial investment of P43,000 and will produce an annual revenue of P10,000 over its five years' life. Use the: i. Present Worth method to decide whether the investment is worthwhile if the prevailing market rate is 6% compounded annually. [5 marks] ii. Is your decision the same if the prevailing market rate is 5% compounded annually? [5 marks] iii. Internal rate of return (IRR) method to decide whether the investment is worthwhile if the prevailing market rate is 5% compounded annually. [5 marks]
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Standards On Auditing For Ca Students
Authors: Anshul Mittal
1st Edition
8182964962, 978-8182964969
