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Matchroom's investment appraisal committee have worked out the Net Cash flows in the working shown below. Additional details of the project are also given
Matchroom's investment appraisal committee have worked out the Net Cash flows in the working shown below. Additional details of the project are also given below. Net Cashflows Year 0 114,285.71 Additional Information Year 1 Year 2 Year 3 Year 5 25,528.57 27,795.21 30,257.55 32,932.34 39,694.93| Year 4 The cost of the machine is 115,000 with a residual value of 3,857 Matchroom prefer the straight-line method as a method of depreciation For capital investment projects ABC Ltd uses a discount rate of 10% and 20% for their IRR calculations. Calculate the IRR (Internal Rate of Return) of the new machine (using the 10% and 20% discount rates provided). Make use of the template provided above and do not round off your calculations until the final answer. NPVa= Round off your answer to the nearest whole number with no sign. If the number is a negative value, include the minus sign e.g. -100000 NPVb= Round off your answer to the nearest whole number with no sign. If the number is a negative value, include the minus sign e.g. -100000 IRR= % Round off your answer to the nearest whole number with no % sign
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