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The following information relates to two capital expenditure projects. Because of capital rationing, only one project can be accepted. Project A Initial cost :R 1
The following information relates to two capital expenditure projects. Because of capital rationing, only one project can be
accepted.
Project A
Initial cost :R
Expected life : years
Scrap value not included in the figures below R
Expected net cash inflows:
End of year:
End year R
End Year R
End Year R
End Year R
End Year R
Project B
Initial cost :R
Expected life : years
Scrap value not included in the figures below R
Thexpected net cash inflows:
End of year:
End year R
End Year R
End Year R
End Year R
End Year R
Company estimates that its cost of capital is
REQUIRED
Use the information provided below to calculate the following:
Payback Period of Project B answer expressed in years, months and days
Return on investment of Project A answer expressed to two decimal places
Net Present Value of both projects.
Internal Rate of Return of Project B answer expressed to two decimal places
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