The following are the net cash flow estimates (in thousands of dollars) of the two (2) proposed projects, you are planning to invest in. Expected Net Cash Flow Year Restaurant & Bar Hardware $M $M 0 (200) (200) 1 10 70 2 60 50 3 100 40 4 120 80 5 150 100 Required: i) What is capital budgeting? ii) Explain the difference between independent projects and mutually exclusive projects

The following are the net cash flow estimates (in thousands of dollars) of the two (2) proposed projects, you are planning to invest in. Expected Net Cash Flow Year Restaurant & Bar Hardware $M $M 0 (200) (200) 1 10 70 2 60 50 3 100 40 4 120 80 5 150 100 Required: i) What is capital budgeting? ii) Explain the difference between independent projects and mutually exclusive projects

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following are the net cash flow estimates (in thousands of dollars) of the two (2) proposed projects, you are planning to invest in.

Expected Net Cash Flow

Year Restaurant & Bar Hardware

$M $M

0 (200) (200)

1 10 70

2 60 50

3 100 40

4 120 80

5 150 100

Required:

i) What is capital budgeting?

ii) Explain the difference between independent projects and mutually exclusive projects

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