2. 2.1 2.2 2.3 2.4 Getum Ltd is considering investing in project Zeta. The following details relate to this project. Project Zeta R562 500 Initial investment Expected economic lifetime Minimum required rate of return Net annual cash inflows: 1st year 2nd year 3rd year 4th year 4 years 12% R180 000 R195 000 R210 000 R220 000 Required Calculate the following in respect of Project Zeta. The payback period (answer expressed in years, months and days) The net present value (NPV) (round off amounts to the nearest Rand) The internal rate of return (IRR) (answer correct to 2 decimal places) Refer to your calculations in question 2.2 and state whether Getum Ltd should invest in Project Zeta or not. Motivate your answer.
2. 2.1 2.2 2.3 2.4 Getum Ltd is considering investing in project Zeta. The following details relate to this project. Project Zeta R562 500 Initial investment Expected economic lifetime Minimum required rate of return Net annual cash inflows: 1st year 2nd year 3rd year 4th year 4 years 12% R180 000 R195 000 R210 000 R220 000 Required Calculate the following in respect of Project Zeta. The payback period (answer expressed in years, months and days) The net present value (NPV) (round off amounts to the nearest Rand) The internal rate of return (IRR) (answer correct to 2 decimal places) Refer to your calculations in question 2.2 and state whether Getum Ltd should invest in Project Zeta or not. Motivate your answer.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
100%
Transcribed Image Text:answer e.g. 168
investments?
2.
2.1
2.2
2.3
2.4
Getum Ltd is considering investing in project Zeta. The following details relate to this project.
Project Zeta
R562 500
Initial investment
Expected economic lifetime
Minimum required rate of return
Net annual cash inflows:
Management Accounting Workbook
1st year
2nd year
3rd year
4th year
4 years
12%
R180 000
R195 000
R210 000
R220 000
Required
Calculate the following in respect of Project Zeta.
The payback period (answer expressed in years, months and days)
The net present value (NPV) (round off amounts to the nearest Rand)
The internal rate of return (IRR) (answer correct to 2 decimal places)
Refer to your calculations in question 2.2 and state whether Getum Ltd should invest in Project Zeta
or not. Motivate your answer.
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