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QUESTION 3 ( 2 0 Marks ) Note: Where applicable, use the present value tables that appear in the nodule guide. REQUIRED Stuct the information
QUESTION
Marks
Note: Where applicable, use the present value tables that appear in the nodule guide.
REQUIRED
Stuct the information provided below and calculate the following:
Payback Period of bath projects expressed in years, nonths and days
mirs
Accounting Rate of Retum on average invesiment of Project B oxpressed to tho decinal places
marks
Nel Present Value of boh projects. The answer must show the present values for each year followed by the caloulaton of the nel pesent value.
marks
Internal Rate of Retum of Projed oxpressed to two decinal placos The answer must include the calculation of two net present valus ising consecuive ralespercentages and interpolation.
marks
INFORMATION
You are required to do an analysis of two proposed capit hvesiment propects. Detals of initial investments, scrap values and net cash flows are presented belor. The company ises a discount rale of when evaluating projects.
tableProject AProject BInitial investment,RScrap value not induded in the figures belowRNet cash flows:Year RRYear RYear RRYear RR
Note:
The profit per year for Project B was R
TOTAL: MARKS
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