Q4. (a) 'Capital budgeting Comment. (b) India Organics Ltd. is considering an investment proposal. Following are the expected cashflows associated with the project: Year Cash Flows (2) 0 -2800000 1 2 1000000 1100000 3 4 1400000 900000 Calculate the IRR of the project. What would be your suggestion to the management of the company regarding acceptance of the project if the cost of capital is 14%? (3+7=10 Marks)
Q4. (a) 'Capital budgeting Comment. (b) India Organics Ltd. is considering an investment proposal. Following are the expected cashflows associated with the project: Year Cash Flows (2) 0 -2800000 1 2 1000000 1100000 3 4 1400000 900000 Calculate the IRR of the project. What would be your suggestion to the management of the company regarding acceptance of the project if the cost of capital is 14%? (3+7=10 Marks)
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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Transcribed Image Text:Q4. (a) 'Capital budgeting
Comment.
(b) India Organics Ltd. is considering an investment proposal. Following are the expected cashflows
associated with the project:
Year
Cash Flows (2)
0
-2800000
1
2
1000000
1100000
3
4
1400000
900000
Calculate the IRR of the project. What would be your suggestion to the management of the company
regarding acceptance of the project if the cost of capital is 14%?
(3+7=10 Marks)
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