You are the Project Analyst for Nairobi Project Advisors who have been asked by a client to advise on which of the following two projects should be accepted. Each project costs US$ 10,000 and each entails a 12% cost of capital: Year Expected Net Cash flows Project X Project Y 0 ($ 10,000) ($ 10,000) 1 6,500 3,500 2 3,000 3,500 3 3,000 3,500 4 1,000 3,500 a) Advise on which project should be undertaken using the Pay Back Period (PBP), Net Present Value (NPV), Internal Rate of Return (IRR), and Modified Internal Rate of Return (MIRR) assuming: i. The projects are independent ii. The projects are mutually exclusive
You are the Project Analyst for Nairobi Project Advisors who have been asked by a client to advise on which of the following two projects should be accepted. Each project costs US$ 10,000 and each entails a 12% cost of capital:
|
Year |
Expected Net Cash flows |
|
|
Project X |
Project Y |
|
|
0 |
($ 10,000) |
($ 10,000) |
|
1 |
6,500 |
3,500 |
|
2 |
3,000 |
3,500 |
|
3 |
3,000 |
3,500 |
|
4 |
1,000 |
3,500 |
a) Advise on which project should be undertaken using the Pay Back Period (PBP),
i. The projects are independent
ii. The projects are mutually exclusive
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