(B) A plant s constructed to supply a combined source of energy heat and electrical power....

Transcribed Image Text:

(B) A plant s constructed to supply a combined source of energy heat and electrical power. The initial capital investment into this project was £ 3 million and its life span is 10 years. The plant started its first operation in its third year. If in its first year of operation it generated £ 15 million and cost of production was £ 2 million. Calculate the following; 13 (a) The net cash flow [2] (b) Discounted Cash flow (DCF) at the rate of 7 % [2] (c) Rate of Return if the predicted cumulative cash flow at the end of the project life was £ 120000 million [2] (B) A plant s constructed to supply a combined source of energy heat and electrical power. The initial capital investment into this project was £ 3 million and its life span is 10 years. The plant started its first operation in its third year. If in its first year of operation it generated £ 15 million and cost of production was £ 2 million. Calculate the following; 13 (a) The net cash flow [2] (b) Discounted Cash flow (DCF) at the rate of 7 % [2] (c) Rate of Return if the predicted cumulative cash flow at the end of the project life was £ 120000 million [2]

Answer rating: 100% (QA)

a The net cash flow Inflow of cash Outflow of cash Inflow Money generated 15 million Outflow operati... View the full answer