Question: Messer's Ltd is considering two potential projects that are Turbine and Wind flow. The forecasted after-tax cash flows are as below: Year Year Turbine (RO)4
Messer's Ltd is considering two potential projects that are Turbine and Wind flow. The forecasted after-tax cash flows are as below: Year Year Turbine (RO)4 Wind Flow (RO) 0 (2,000,000) (2,000,000) 1 950,000 700,000 2 800,000 700,000 3 400,000 700,000 4 200,000 700,000 i) Calculate Payback period for Project Turbine and Project Wind Flow ii) Calculate Net present value for Project Turbine and Project Wind Flow. Use a discount rate of 6%. iii) Which project should be chosen based on NPV and why. iv) Calculate Internal Rate of Return for Project Wind Flow only
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