REQUIRED Study the information provided below and calculate the following: 3.1 Payback Period of Project A (answer expressed in years, months and days). 3.2 Accounting Rate of Return (on average investment) of Project B (answer expressed to two decimal places). 3.3 Net Present Value of both projets (amounts rounded off to the nearest Rand). 3.4 Benefit Cost Ratio of Project A (answer expressed to three decimal places). 3.5 Internal Rate of Return of Project B (answer expressed to two decimal places). INFORMATION The following information relates to two possible capital expenditure projects being considered by Edam Ltd. Because of capital rationing, only one project can be accepted. Project A Project B Initial cost R800 000 R800 000 Expected useful life 5 years 5 years Average annual profit R80 000 R80 000 Expected net cash inflows: R R Year 1 240 000 240 000 Year 2 260 000 240 000 Year 3 280 000 240 000 Year 4 220 000 240 000 Year 5 200 000 240 000 The company estimates that its cost of capital is 15%
Please help answer From Question 3.1 to 3.5
REQUIRED
Study the information provided below and calculate the following:
3.1 Payback Period of Project A (answer expressed in years, months and days).
3.2 Accounting Rate of
two decimal places).
3.3
3.4 Benefit Cost Ratio of Project A (answer expressed to three decimal places).
3.5
INFORMATION
The following information relates to two possible capital expenditure projects being considered by Edam
Ltd. Because of capital rationing, only one project can be accepted.
Project A Project B
Initial cost R800 000 R800 000
Expected useful life 5 years 5 years
Average annual profit R80 000 R80 000
Expected net
Year 1 240 000 240 000
Year 2 260 000 240 000
Year 3 280 000 240 000
Year 4 220 000 240 000
Year 5 200 000 240 000
The company estimates that its cost of capital is 15%
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