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You have to choose numbers from your mind to solve the data from you choose any number International Machineries LLC is considering allocating a limited
You have to choose numbers from your mind to solve
the data from you choose any number
International Machineries LLC is considering allocating a limited amount of capital investment funds among Three proposals. The amount of proposed investment, and net cash flow for each proposal are as follows: 1. Proposed Investment OMR 2. Each Proposal has expected life of 5 years. 3. The cost of capital is_ _? %. (Present Value table attached) 2 OMR Net cash flow during the expected life of the Proposals is given below. Year 1 3 5 Proposal A ? Proposal B OMR _? Proposal C OMR__? Note: Net Cash inflow must be different for every year. Required: Which Proposal is preferable on the basis of the following capital budgeting evaluation methods? And Why? 1) Payback Period ii) Net Present Value The following are the present value factors Discount 2 3 5 factor/year 10% 0.909 0.826 0.751 0.683 0.621 11% 0.901 0.812 0.731 0.659 0.593 12% 0.893 0.797 0.712 0.636 0.567 13% 0.885 0.783 0.693 0.613 0.543 14% 0.877 0.769 0.675 0.592 0.519 15% 0.870 0.756 0.658 0.572 0.497 Step by Step Solution
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