project planning and control

1. SKIG Lti, a consmuction company is comsiderng the selection of one from two mulually 646.000 and = f forecast to gemenate ammual cashflows of K500. 000. Its estimated residual yalue afte five years is K301, 000, Project Z. costing K556, 000 and with a scrap yalue of K56. 000, shoulid generate ammal cashflows of K200. 000. The company opetates at stmanht-ine depfeciation polioy and discounts castfious at 15p. Caloulate the payback. APR. NPT and IRR for each pajpject and discuss wilioh seems to be the better investment. oppouminin 2. A tuanspot company has three potantial projofts plannud. Hach wil require investment in per anmannm. IIF FE -FF - GEIC 1. SKIG Ltd, a construction company, is comsidering the selection of one from tho muthally exclusive investments projects, each with an estimated 5 -year life. Project Y costs K1, 616,000 and is fotecast to generate anmual cashfilows of K500, 000. Its estimated residual value after five years is K301, 000. Project Z, costing K556, 000 and with a scrap value of K56, 000, should generate annual cashfloms of K200, 000. The company operates al straight-line depreciation policy and discounts cashflows at 15%. Calculate the payback, ARR, NPV and IRR for each project and discuss which seems to be the better investment opportunity