1.Consider the following are mutually exclusive project .Whichever project that will be chosen, a 15% return is...
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Question:
1.Consider the following are mutually exclusive project .Whichever project that will be chosen, a 15% return is required on both investment.
Year Cash Flow (M) Cash Flow (N)
0 (RM350,000) (RM40,000)
1 RM30,000 RM19,000
2 RM60,000 RM12,000
3 RM60,000 RM18,000
4 RM400,000 RM10,500
(a)Apply the discounted payback criterion and state which investment is chosen.
(9 marks)
(b)Apply the NPV criterion and state which investment is chosen.
(6 marks)
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