Question
Assume that your company is given the following list of projects with their initial outlay, payback period, NPV and IRR. Your firms required rate of
Assume that your company is given the following list of projects with their initial outlay, payback period, NPV and IRR. Your firms required rate of return is 15% and the maximum payback period is 3.5 years.
Rank the projects on the basis of NPV per RM of investment. (6 marks)
Which of these projects should the business invest in if your company is unable to invest more than RM380,000 in the current year? (4 marks)
| Projects | Initial outlay (RM000)
| Payback period (years) | NPV (RM000) | IRR (%) | Ranking
|
| A | 330 | 4 | -50 | 23 |
|
| B | 370
| 4.2 | 320 | 26 |
|
| C | 200 | 3 | 10 | 15 |
|
| D | 400 | 3.8 | 100 | 18 |
|
| E | 8 | 3.5 | 3 | 10 |
|
| F | 100 | 2 | -130 | 12 |
|
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Ultimate Manual For Newbie Property Investors
Authors: Kimberly K. Benson
1st Edition
979-8866108688
