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QUESTION 5 Note: Where discount factors are required, use only the present value tables ( Appendix 1 and 2 ) that appear after QUESTION 5
QUESTION Note: Where discount factors are required, use only the present value tables Appendix and that appear after QUESTION REQUIRED From the information provided below which project would you recommend? Substantiate your answer by showing the relevant calculations that take the time value of money into account. Note: The IRR is not required. INFORMATION MK Enterprises has R which it will invest if the investment earns at least per annum. Three projects are being considered, each of which will cost R to commence. Project would earn R at the end of the first year. Project would earn R at the end of the second year. Project would earn R at the end of the first year and R at the end of the second year. REQUIRED Study the information given below to determine whether the company should accept the investment opportunity or not. Motivate your answer by calculating the Accounting Rate of Return on average investment expressed to two decimal places INFORMATION Universal Limited is a manufacturing company and its management is appraising the production and sale of a new product. This would involve the purchase of a new machine with a cost price of R and an expected scrapsalvage value of R The net cash flows from the machine are estimated to be R per year for eight years. Depreciation is expected to be R per year. The company's cost of capital is
QUESTION
Note: Where discount factors are required, use only the present value tables Appendix and
that appear after QUESTION
REQUIRED
From the information provided below which project would you recommend? Substantiate
your answer by showing the relevant calculations that take the time value of money into
account. Note: The IRR is not required.
INFORMATION
MK Enterprises has R which it will invest if the investment earns at least per annum. Three
projects are being considered, each of which will cost R to commence.
Project would earn R at the end of the first year.
Project would earn R at the end of the second year.
Project would earn R at the end of the first year and R at the end of the second year.
REQUIRED
Study the information given below to determine whether the company should accept the
investment opportunity or not. Motivate your answer by calculating the Accounting Rate
of Return on average investment expressed to two decimal places
INFORMATION
Universal Limited is a manufacturing company and its management is appraising the production and
sale of a new product. This would involve the purchase of a new machine with a cost price of
R and an expected scrapsalvage value of R
The net cash flows from the machine are estimated to be R per year for eight years.
Depreciation is expected to be R per year. The company's cost of capital is
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