Question 2:Bunnings Ltd is considering to invest in one of the two following projectsto buy a new equipment. Each equipment will last 5 years and have no salvage value at the end. The company’s required rate of return for all investment projects is 8%. The cash flows of the projects are provided below.   Equipment 1 Equipment 2 Cost $186,000 $195,000 Future Cash  FlowsYear 1Year 2Year 3Year 4Year 5 Year     86 000 93 000 83 000 75 000 55 000     97 000 84 000 86 000 75 000 63 000 Required: a)Identify which option of equipment should the company accept based on Profitability Index? b)Identify which option of equipment should the company accept based on discountedpay back method if the payback criteria is maximum 2 years?

Q: The following are the cash flows of two projects: Year Project A 0 $ (340) Project B $ (340) 1 170…

A: Payback period is the duration of time in which the initial investment is recovered by the cash…

Q: 1. What is the Payback Period for this project? Judson Corp. is considering an investment that will…

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A: PAYBACK PERIODPayback Period is one of the important Capital Budgeting Techniques. Payback Period is…

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A: Net present value is a capital budgeting tool based on the concept of time value of money.

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A: The NPV and Discounted payback period can be calculated as follows :

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A:

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A: Excel Spreadsheet:

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Q: f2

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Q: kau.3

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.