Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

AUGUST 26 LOGISTICS (PTY) LTD is in WINDHOEK, Namibia and is part of the Food Manufacturing Industry. AUGUST 26 LOGISTICS (PTY) LTD has 30 total

AUGUST 26 LOGISTICS (PTY) LTD is in WINDHOEK, Namibia and is part of the Food Manufacturing Industry. AUGUST 26 LOGISTICS (PTY) LTD has 30 total employees across all its locations and generates $4.89 million in sales (USD). (Employees figure is estimated, Sales figure is modelled). AUGUST 26 LOGISTICS (PTY) LTD is considering two projects. The projects are similar in nature and are expected to both operate for four years. Due to unavailability of funds to undertake both, only one project can be accepted. The cost of capital is 12% and depreciation is charged on the straight-line basis. The following information is available:

Profit after depreciation

Project A

Project B

Initial investment

46 000

46 000

Year 1

6 500

4 500

Year 2

3 500

2 500

Year 3

13 500

4 500

Year 4

(1 500)

14 500

Estimated scrap value at the end of year 4

4 000

4 000

Calculate the Net Present Value Proposal A. Hint: work with 3 decimal places

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quality Auditing A Tool For Excellence

Authors: David Mills, J. Mills

1st Edition

041245890X, 978-0412458903

More Books

Students also viewed these Accounting questions

Question

Explain what is meant by the terms unitarism and pluralism.

Answered: 1 week ago