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Foalsa Ltd have been conducting investment appraisal on two potential new projects the company is looking at undertaking. The management accountant is new to the
Foalsa Ltd have been conducting investment appraisal on two potential new projects the company is looking at undertaking. The management accountant is new to the business and has followed a template calculation for the NPV and IRR that was set up by the previous management accountant for a past project. Having completed the calculations, the management accountant discovered the cost of capital figure the business uses has changed since the template was constructed and is in fact 2% higher. What will be the effect of correcting this error on the NPV and IRR figures
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