Question
Q2.Below are cash flows for 3 projects, Project Trun, Project Beden and Project Klentun. The MARR is 12%. Year 0 1 2 3 4 5
Q2.Below are cash flows for 3 projects, Project Trun, Project Beden and Project Klentun. The MARR is 12%.
| Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
|---|---|---|---|---|---|---|---|
| Trun | -27000 | 8600 | 7000 | 9700 | 8300 | 12300 | 9500 |
| Beden | -10000 | 3600 | 2000 | 4800 | 3300 | 12300 | 2400 |
| Klentun | -10000 | 2000 | 3000 | 3000 | 3000 | 1500 | 1000 |
The IRR of Trun is 23.84201925993%, while Beden is34.341693076491%.
Show your detailed calculations in the workings to be submitted.
Q.2.a. Calculate the IRR of Klenten. Use trial & error method. (9 marks). Format : 0.4089Q.2.b. What is the Incremental IRR for the projects compared? Show calculations using trial & error method. (14 marks). Format : 0.4784Q.2.c. Which project should be chosen? Write down your reason in the workings to be submitted. (2 marks). Format : xxxx
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Personal Finance
Authors: Jack Kapoor
13th Edition
1260799735, 9781260799736
