Question: 1. A computer programing project is adding a new product line that will require an investment of SR 1,800,000. Managers estimate that this investment will
1. A computer programing project is adding a new product line that will require an investment of SR 1,800,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of SR 400,000 the first year, SR380,000 the second year, and SR300,000 each year thereafter for eight years. Compute the payback period. 2. Project A costs SR 260,000, and offers seven annual net cash inflows of SR 60,000. The project requires an annual return of 14% on investments of this nature. What is the Net Present Value of the project? (The annuity PV factor, i = 14% and n = = 7 is 4.288). 3. A project has an annual cash inflow of SR 22,400,300. The cost of the project is SR 16,000,000 with an economic life of 6 years. Calculate the Accounting Rate of Return (ARR)
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