Dareka's Investments Limited (DIL) is considering two projects in Western Jamaica. The initial capital outlay for...

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Dareka's Investments Limited (DIL) is considering two projects in Western Jamaica. The initial capital outlay for each project is US $82,000 and the cost of capital for the DIL is 8%. The cash flow for each project are detailed in the table below. IN a L.) Year VA 1 2 3 4 5 Solar Panels US $ 31,500 0 32,400 19,000 21,000 Wind Turbines US $ 36,300 22,600 0 Calculate each project's Payback period (11.) Assuming that the projects are mutually exclusive, which project(s) would you recommend for DIL according to the Payback period? Why would you make this recommendation. (2 marks) Calculate each project's Net Present Value (NPV). iv.) Assuming that the projects are independent, which project(s) would you recommend for DIL according to the NPV? Why would you make this recommendation? (2 Marks) Calculate each project's Discounted Payback period. (VL) Explain the major problem with the Internal Rate of Return (IRR) that is addressed by using the Modified Internal Rate of Return (MIRR) Explain how the MIRR addresses this problem (5 marks) 13,000 32,000 (4 marks) (6 Marks) (6 Marks) Dareka's Investments Limited (DIL) is considering two projects in Western Jamaica. The initial capital outlay for each project is US $82,000 and the cost of capital for the DIL is 8%. The cash flow for each project are detailed in the table below. IN a L.) Year VA 1 2 3 4 5 Solar Panels US $ 31,500 0 32,400 19,000 21,000 Wind Turbines US $ 36,300 22,600 0 Calculate each project's Payback period (11.) Assuming that the projects are mutually exclusive, which project(s) would you recommend for DIL according to the Payback period? Why would you make this recommendation. (2 marks) Calculate each project's Net Present Value (NPV). iv.) Assuming that the projects are independent, which project(s) would you recommend for DIL according to the NPV? Why would you make this recommendation? (2 Marks) Calculate each project's Discounted Payback period. (VL) Explain the major problem with the Internal Rate of Return (IRR) that is addressed by using the Modified Internal Rate of Return (MIRR) Explain how the MIRR addresses this problem (5 marks) 13,000 32,000 (4 marks) (6 Marks) (6 Marks)

Answer rating: 100% (QA)

To answer all the questions lets go step by step Calculate each projects Payback period The payback period is the time it takes for a project to recover its initial investment We sum the cash flows un... View the full answer