Question 4 Jamie Ltd is looking into some potential investment projects. Relevant information is summarised below:...

 

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Question 4 Jamie Ltd is looking into some potential investment projects. Relevant information is summarised below: Project Cost of Investment a) b) c) Year 1 2 Required: Year 3 4 5 6 $ Poppy $600,000 The required rate of return is 11%. [ Refer to Appendix A for discount factors] Year Cash Flow Cumulative Cashflows $ $ 120,000 180,000 220,000 290,000 320,000 390,000 Cash Flow Sweety $600,000 Estimated net cash flows $ 150,000 220,000 280,000 310,000 370,000 390,000 Discount Factor at (to fill the discount factor) Present Value Calculate the payback period for both the projects. Calculate the Net Present Value (NPV) of both projects. Evaluate and advise the management accordingly. $ [11 marks] [16 marks] [3 marks] [Total: 30 marks] Question 4 Jamie Ltd is looking into some potential investment projects. Relevant information is summarised below: Project Cost of Investment a) b) c) Year 1 2 Required: Year 3 4 5 6 $ Poppy $600,000 The required rate of return is 11%. [ Refer to Appendix A for discount factors] Year Cash Flow Cumulative Cashflows $ $ 120,000 180,000 220,000 290,000 320,000 390,000 Cash Flow Sweety $600,000 Estimated net cash flows $ 150,000 220,000 280,000 310,000 370,000 390,000 Discount Factor at (to fill the discount factor) Present Value Calculate the payback period for both the projects. Calculate the Net Present Value (NPV) of both projects. Evaluate and advise the management accordingly. $ [11 marks] [16 marks] [3 marks] [Total: 30 marks]

Answer rating: 100% (QA)

a The payback period is the number of years it takes for an investment to generate enough cash flows ... View the full answer