A business venture identified two variable mutually exclusive projects. The life of each of the projects...
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A business venture identified two variable mutually exclusive projects. The life of each of the projects is estimated to be 5 years. The salvage of each of the projects at its life end is negligible. The minimum attractive rate of return is 12%. Project A1 A2 200,000 280,000 Initial investment (Rs.) Annual Revenue (Rs.) 75,000 90,000 Salvage value 20,000 25,000 (a) Calculate the NPV, Payback period and ARR. (10 marks) A business venture identified two variable mutually exclusive projects. The life of each of the projects is estimated to be 5 years. The salvage of each of the projects at its life end is negligible. The minimum attractive rate of return is 12%. Project A1 A2 200,000 280,000 Initial investment (Rs.) Annual Revenue (Rs.) 75,000 90,000 Salvage value 20,000 25,000 (a) Calculate the NPV, Payback period and ARR. (10 marks)
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Solution Computation of Cash Payback period Year Outflow Inflow Net cashflow Cmmulative cash flow 0 ... View the full answer
Related Book For
Economics Principles and Policy
ISBN: 978-0538453653
12th edition
Authors: William J. Baumol, Alan S. Blinder
Posted Date:
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