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No excel workings please QUESTION 1 The forecasts below were presented by the Accounting Department of a firm for three mutually exclusive projects. C C

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QUESTION 1 The forecasts below were presented by the Accounting Department of a firm for three mutually exclusive projects. C C CHELSEA 0 0 -9,000 6,000 C ; 4,000 1,800 5,000 -9,000 1,800 1,800 1,800 1,800 1,200 -6,000 1,200 1,200 1,200 a. If the cost of capital is 10%, calculate the net present value for each project. [3 marks] b. If the above forecasts were overstated by 5% on average, calculate the correct cash flows. [3 marks] c. Based on the new figures, calculate the project's net present value for 10% cost of capital. [4 marks] d. Calculate the project's net present value if the cost of capital is 15%. [5 marks] [TOTAL = 15 MARKS]

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