Question: K < 7/8 > > QUESTION 5 A. Explain TWO (2) factors affecting dividend policy decisions. (20 MARKS) (4 marks) B. The Roronoa Corporation

K < 7/8 > > QUESTION 5 A. Explain TWO (2) factors affecting dividend policy decisions. (20 MARKS) (4 marks) B. The Roronoa Corporation is considering two mutually exclusive projects. The cash flows associated with those projects are as follows: Year Project A Project B 0 -60,000 -60,000 1 16,000 0 2 16,000 0 3 16,000 0 4 16,000 0 5 16,000 100,000 4 The required rate of return of these projects is 12%. i. Calculate each project's payback period? (3 marks) ii. Calculate each project's net present value? (3 marks) iii. Discuss the investment decision should be made by the company and why. (2 marks) BB A 11 D80% - T

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