Coco Industries has four potential projects with an initial cost of RM2,000,000 each. The capital budget for the year will only allow Coco industries to accept one of the four projects. Given the discount rates and the future cash flows of each project, calculate the NPV and justified which project should they accept. Year Project A Project B Project C Project D 1 500,000 600,000 1,000,000 300,000 2 500,000 600,000 800,000 500,000 3 500,000 600,000 600,000 700,000 4 500,000 600,000 400,000 900,000 5 500,000 600,000 200,000 1,100,000 Discount rate 5% 9% 15% 22%
Coco Industries has four potential projects with an initial cost of RM2,000,000 each. The capital budget for the year will only allow Coco industries to accept one of the four projects. Given the discount rates and the future cash flows of each project, calculate the NPV and justified which project should they accept. Year Project A Project B Project C Project D 1 500,000 600,000 1,000,000 300,000 2 500,000 600,000 800,000 500,000 3 500,000 600,000 600,000 700,000 4 500,000 600,000 400,000 900,000 5 500,000 600,000 200,000 1,100,000 Discount rate 5% 9% 15% 22%
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 2CMA: Staten Corporation is considering two mutually exclusive projects. Both require an initial outlay of...
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Coco Industries has four potential projects with an initial cost of RM2,000,000 each. The capital budget for the year will only allow Coco industries to accept one of the four projects. Given the discount rates and the future cash flows of each project, calculate the
| Year | Project A | Project B | Project C | Project D |
| 1 | 500,000 | 600,000 | 1,000,000 | 300,000 |
| 2 | 500,000 | 600,000 | 800,000 | 500,000 |
| 3 | 500,000 | 600,000 | 600,000 | 700,000 |
| 4 | 500,000 | 600,000 | 400,000 | 900,000 |
| 5 | 500,000 | 600,000 | 200,000 | 1,100,000 |
| Discount rate | 5% | 9% | 15% | 22% |
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