Construction Consult is at the point of considering a project to undertake with a capital investment...

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Construction Consult is at the point of considering a project to undertake with a capital investment of only £5,500. There are two projects to choose from. The cash flow for each is given in Table 2. The required return for both projects is 12%. Table 2. Cash flow for projects A and B Period 0 1 2 3 4 Cash Flow for Project A -5500 2500 2200 2200 1650 Cash Flow for Project B -5500 1100 2200 2750 3000 (a) Compare the Payback time, NPV and IRR for the project. Use your answer to determine which of the projects to choose, giving the decision rules and appropriate justification for your choice. (b) Describe the Lifecycle of this project. Use appropriate evidence base for your discussion. (c) Assume that you are building a residential project of 2 of these houses. Show option(s) of how you would schedule the project to minimize the duration and/or maintain quality. Explain your suggested option(s) Construction Consult is at the point of considering a project to undertake with a capital investment of only £5,500. There are two projects to choose from. The cash flow for each is given in Table 2. The required return for both projects is 12%. Table 2. Cash flow for projects A and B Period 0 1 2 3 4 Cash Flow for Project A -5500 2500 2200 2200 1650 Cash Flow for Project B -5500 1100 2200 2750 3000 (a) Compare the Payback time, NPV and IRR for the project. Use your answer to determine which of the projects to choose, giving the decision rules and appropriate justification for your choice. (b) Describe the Lifecycle of this project. Use appropriate evidence base for your discussion. (c) Assume that you are building a residential project of 2 of these houses. Show option(s) of how you would schedule the project to minimize the duration and/or maintain quality. Explain your suggested option(s)

Answer rating: 100% (QA)

a To compare the payback time NPV Net Present Value and IRR Internal Rate of Return for the two projects lets calculate these metrics for each project Payback Time The payback time is the time require... View the full answer