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QUESTION 4 (20 Marks) A company is able to invest in Project A and Project B. The company's required rate of return is 12%. Assuming
QUESTION 4 (20 Marks) A company is able to invest in Project A and Project B. The company's required rate of return is 12%. Assuming no taxation and depreciation, you are required to select either Project A or Project B. The cost of either project is R20 000 000-00. (All the figures below are in millions) Year Project A Cash flow Project B Cash flow 0 -20 -20 1 4 10 2 4 10 3. 12 5 4 12 5 Appraise the above projects and select the viable project using: 2.1 Payback Period Method. (8) 2.2 Net Present Value Method. (12)
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