4. Using a discounted rate of 12 percent, INITIAL COST NET CASH FLOW YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 PROJECT A (BROILER) K100,000 (20,000) 10.000 40.000 40.000 150.000 PROJECT B (LAYERS) K100,000 33,000 33,000 33,000 33.000 33,000 a. Determine the net present value of project A and B b. Calculate the IRR on mutually exclusive investment of project A and B. Which project must the farm undertake and why? C.
4. Using a discounted rate of 12 percent, INITIAL COST NET CASH FLOW YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 PROJECT A (BROILER) K100,000 (20,000) 10.000 40.000 40.000 150.000 PROJECT B (LAYERS) K100,000 33,000 33,000 33,000 33.000 33,000 a. Determine the net present value of project A and B b. Calculate the IRR on mutually exclusive investment of project A and B. Which project must the farm undertake and why? C.
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Transcribed Image Text:4. Using a discounted rate of 12 percent,
INITIAL COST
NET CASH FLOW
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
PROJECT A (BROILER)
K100,000
(20,000)
10,000
40.000
40.000
150.000
PROJECT B (LAYERS)
K100,000
33,000
33,000
33,000
33,000
33,000
a. Determine the net present value of project A and B
b. Calculate the IRR on mutually exclusive investment of project A and B.
C. Which project must the farm undertake and why?
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