Question
REQUIRED Calculate the following from the information given below: Payback Period (expressed in years). (6) Return on investment (expressed to two decimal places). (10) INFORMATION
- REQUIRED
Calculate the following from the information given below:
- Payback Period (expressed in years). (6)
- Return on investment (expressed to two decimal places). (10)
INFORMATION
Tridev Limited intends investing in a new project. The following details relate to one of the projects it can choose from:
| Initial cost | R400 000 | |
| Expected useful life | 4 years | |
| Scrap value | 0 | |
| Depreciation per year | R100 000 | |
| Minimum required rate of return | 14% | |
| Expected net cash flows: | R | |
| End of | Year 1 | 110 000 |
|
| Year 2 | 120 000 |
|
| Year 3 | 125 000 |
|
| Year 4 | 160 000 |
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