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Question 27 (10 marks) Johnsons Tiles P/L is considering a project to produce a new style of outdoor tile. Required return is 13%. Project outflows/inflows
Question 27 (10 marks) Johnsons Tiles P/L is considering a project to produce a new style of outdoor tile. Required return is 13%. Project outflows/inflows are expected to be; Year 0:CF = -$800,000 Year 1:CF = $252,500 Year 2:CF = $318,600 > Year 3:CF = $410,800 a) Calculate the Net Present Value (4 marks) b) Calculate the Internal Rate of Return. (4 marks) c) Consider whether the project is to be accepted or rejected. (2 marks)
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