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INFORMATION The management of Maya Enterprises has to choose between two projects viz. Project R and Project E, each of which requires an initial investment of R250 000. No scrap values are expected. The following information is presented to you: PROJECT R Net cash inflows: PROJECT E Net Profit: Year R R 1 63 000 8 000 2 63 000 18 000 3 63 000 12 000 4 63 000 20 000 5 63 000 7 000 The required rate of return is 15%. Depreciation is calculated using the straight-line method.

INFORMATION The management of Maya Enterprises has to choose between two projects viz. Project R and Project E, each of which requires an initial investment of R250 000. No scrap values are expected. The following information is presented to you: PROJECT R Net cash inflows: PROJECT E Net Profit: Year R R 1 63 000 8 000 2 63 000 18 000 3 63 000 12 000 4 63 000 20 000 5 63 000 7 000 The required rate of return is 15%. Depreciation is calculated using the straight-line method.

Essentials Of Investments
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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Use the information provided below to calculate the following:
4.1 Payback Period of Project E (answer expressed in years, months and days). 
4.2 Net Present Value of project E. (Round off amounts to the nearest Rand.) 
4.3 Accounting Rate of Return of Project E (answer rounded off to 2 decimal places). 
4.4 Internal Rate of Return of Project Ram (answer rounded off to 2 decimal places). 

INFORMATION The management of Maya Enterprises has to choose between two projects viz. Project R and Project E, each of which requires an initial investment of R250 000. No scrap values are expected. The following information is presented to you: PROJECT R Net cash inflows: PROJECT E Net Profit: Year R R 1 63 000 8 000 2 63 000 18 000 3 63 000 12 000 4 63 000 20 000 5 63 000 7 000 The required rate of return is 15%. Depreciation is calculated using the straight-line method.
Transcribed Image Text:INFORMATION The management of Maya Enterprises has to choose between two projects viz. Project R and Project E, each of which requires an initial investment of R250 000. No scrap values are expected. The following information is presented to you: PROJECT R Net cash inflows: PROJECT E Net Profit: Year R R 1 63 000 8 000 2 63 000 18 000 3 63 000 12 000 4 63 000 20 000 5 63 000 7 000 The required rate of return is 15%. Depreciation is calculated using the straight-line method.
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