Question
Dakota Ltdisconsidering two mutually exclusive investments. The project expected cash flows are asfollows Year A B 0 (200,000) (200,000) 1 120,000 100,000 2 60,000 80,000
Dakota Ltdisconsidering two mutually exclusive investments. The project expected cash flows are asfollows Year A B 0 (200,000) (200,000) 1 120,000 100,000 2 60,000 80,000 3 40,000 50,000 4 50,000 40,000 Dakota intends to borrow cash to finance the project and the cost of borrowing is 13%p.a. Required a) What is the payback period of each project? (4 Marks) b) Calculate the Net Present Value (NPV) each of the projects (4 Marks) c) Calculate the Internal Rate of Return (IRR) of each of the projects (4 Marks) d) Basedonthecalculationsabove;whichprojectwouldyouadviseDakota Ltd.to
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