Question
You have a tract of land on which trees can be grown. The initial cost of planting the trees is Rs 80,000. The net revenue
You have a tract of land on which trees can be grown. The initial cost of planting the trees is Rs 80,000. The net revenue realisable from the harvesting of trees would be as follows:
The opportunity cost of capital is 10 per cent. What is optimum time for harvesting the trees? Assume continuous compounding.
A firm is considering the following two Projects,MandN:
Project M Project N
Investment (Rs) 250,000 250,000
Annual net cash inflow (Rs) 80,000 60,000
Life (years) 6 10
Cost of capital (per cent) 10 10
Because of capital rationing imposed by management, the firm can choose only one project. Which project should be selected? Why?
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Management and Cost Accounting
Authors: Colin Drury
8th edition
978-1408041802, 1408041804, 978-1408048566, 1408048566, 978-1408093887
