Question 2 Sunshine Corporation is reviewing an investment proposal. The initial cost of the investment is R52 500. The estimated cash flows and net profit for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. year Net cash flows Net profit R20 000 R2 500 R17 500 R3 500 R15 000 R4 500 R12 500 R5 500 R10 000 R6 500 The cost of capital is 12%. Required: Calculate the following: 1. Payback Period 2. Net Present value 3. Accounting rate of return
Question 2 Sunshine Corporation is reviewing an investment proposal. The initial cost of the investment is R52 500. The estimated cash flows and net profit for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. year Net cash flows Net profit R20 000 R2 500 R17 500 R3 500 R15 000 R4 500 R12 500 R5 500 R10 000 R6 500 The cost of capital is 12%. Required: Calculate the following: 1. Payback Period 2. Net Present value 3. Accounting rate of return
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter16: Financial Planning And Forecasting
Section: Chapter Questions
Problem 2P: AFN EQUATION Refer to Problem 16-1. What additional funds would be needed if the companys year-end...
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Question 2
Sunshine Corporation is reviewing an investment proposal. The initial cost of the investment is
R52 500. The estimated cash flows and net profit for each year are presented in the schedule
below. All cash flows are assumed to take place at the end of the year.
year | Net cash flows | Net profit |
R20 000 | R2 500 | |
R17 500 | R3 500 | |
R15 000 | R4 500 | |
R12 500 | R5 500 | |
R10 000 | R6 500 |
The cost of capital is 12%.
Required:
Calculate the following:
1. Payback Period
2.
3. Accounting
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