Q3. A project has following cash flows, like; Initial investment 1000,000 and cash inflows generated are...
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Q3. A project has following cash flows, like; Initial investment 1000,000 and cash inflows generated are 371779 for next 4 years. Cost of capital is 20%. The project manager is asking government to provide some subsidy. For calculating subsidy following options are given. Which option will be best option to get subsidy from government. 1. PB of the project becomes 2 years 2. IRR of the project 25% 3. Npv of the project is 175,000 4. NPV of the project is 65000 at 25% cost of capital Q4 (A). Year Q4 (B). Period A 0 (415,000.00) 1 49,000.00 2 57,000.00 3 74,000.00 4 530,000.00 CFO CF1 CF2 CF3 COST OF CAPITAL CALCULATE NPV, IRR, PROFITABILITY INDEX, PAYBACK PERIOD AT required rate of return 13% for project A & B. Project A -100 50 70 40 10% B (35,000.00) 20,000.00 15,000.00 14,000.00 11,000.00 Project B -100 70 75 10 10% CALCULATE IRR, NPV AND CROSS OVER RATE OF THE TWO PROJECTS. (7.5) (10) (7.5) Q3. A project has following cash flows, like; Initial investment 1000,000 and cash inflows generated are 371779 for next 4 years. Cost of capital is 20%. The project manager is asking government to provide some subsidy. For calculating subsidy following options are given. Which option will be best option to get subsidy from government. 1. PB of the project becomes 2 years 2. IRR of the project 25% 3. Npv of the project is 175,000 4. NPV of the project is 65000 at 25% cost of capital Q4 (A). Year Q4 (B). Period A 0 (415,000.00) 1 49,000.00 2 57,000.00 3 74,000.00 4 530,000.00 CFO CF1 CF2 CF3 COST OF CAPITAL CALCULATE NPV, IRR, PROFITABILITY INDEX, PAYBACK PERIOD AT required rate of return 13% for project A & B. Project A -100 50 70 40 10% B (35,000.00) 20,000.00 15,000.00 14,000.00 11,000.00 Project B -100 70 75 10 10% CALCULATE IRR, NPV AND CROSS OVER RATE OF THE TWO PROJECTS. (7.5) (10) (7.5)
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3 Company will not get the subsidy because company ... View the full answer
Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
Posted Date:
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