Question
Marian Ltd is considering two mutually - exclusive projects with the following details: Project A Initial investment Le 450,000 Scrape value in year 5 Le
Marian Ltd is considering two mutually - exclusive projects with the following details:
Project A Initial investment Le 450,000
Scrape value in year 5 Le 20,000 Year 1 2 3 4 5
( Le000) ( Le000 ) (Le000) (Le000) ( Le000)
Annual Cash flows 200 150 100 100 100
Project B:
Initial investment Le 100,000
Scrape value in year 5 Le10,000
Year 1 2 3 4 5
( Le000 ) ( Le000 ) ( Le000) ( Le000) ( Le000 )
Annual Cash flows 50 40 30 20 20
Assuming that the initial investment is at the start of the project and the annual cash flows accrue evenly over the year. Calculate the discounted payback for both projects if the relevant cost of capital is 10%.
NOTE: Contacted the lecturer. Got feedback that this is all to the question as there is an indication of ANNUAL FLOWS for both project A and B. Kindly assist.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started