Carl Limited is considering which of three projects it should undertake. The initial investment will be...
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Carl Limited is considering which of three projects it should undertake. The initial investment will be £15,000, and the cost of capital is 8 %. The scrap/residual value at the end of the project period will be £2,000. The net after tax cash flows of the projects are as follows: Project A Project B £ Year 1 Year 2 Year 3 Year 4 Year 5 Required: 4,000 6,000 5,000 5,000 5,000 4,000 3,600 Project C £ 4,000 5,000 3,000 5,000 1,400 (a) Calculate the, the Payback Period, and the net Present Value of for each project. Carl Limited is considering which of three projects it should undertake. The initial investment will be £15,000, and the cost of capital is 8 %. The scrap/residual value at the end of the project period will be £2,000. The net after tax cash flows of the projects are as follows: Project A Project B £ Year 1 Year 2 Year 3 Year 4 Year 5 Required: 4,000 6,000 5,000 5,000 5,000 4,000 3,600 Project C £ 4,000 5,000 3,000 5,000 1,400 (a) Calculate the, the Payback Period, and the net Present Value of for each project.
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a Project A Payback Period 15000 4000 5000 25 Years Net Present Value NPV 4000 x 1081 5000 x ... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
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