Question
You are a financial analyst for Dolomite Corporation. The director of finance has asked you to analyse two proposed capital investments. Year Project X (RM)
You are a financial analyst for Dolomite Corporation. The director of finance has asked you to analyse two proposed capital investments.
| Year | Project X (RM) | Project Y (RM) |
| 0 | (10,000) | (10,000) |
| 1 | 6,500 | 3,500 |
| 2 | 3,000 | 3,500 |
| 3 | 3,000 | 3,500 |
| 4 | 1,000 | 3,500 |
The companys cost of capital is 12 percent and these projects are mutually exclusive. Calculate and answer the followings:
(a)Payback period for both projects. (6 marks)
(b)Net present value for both projects. (6 marks)
(c)Internal rate of return for project Y only. (7 marks)
(e)Which project would you choose and state your reasons. (2 marks)
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Introduction To Health Care Management
Authors: Sharon B. Buchbinder, Nancy H. Shanks
3rd Edition
128408101X, 9781284081015
