Q.No. 3 Estimated Time To Complete Question (30 Minutes) You are a Finance Manager of SBK...

 

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Q.No. 3 Estimated Time To Complete Question (30 Minutes) You are a Finance Manager of SBK Pharma Ltd. The Director Finance has asked you to analyze two proposed capital investments, Project Indus and Project Neelam. Each project has a cost of PKR 100,000, and the cost of capital for each is 12%. The projects' expected net cash flows are as follows Year 01234 Required: A) B) Expected Net Cash Flows Project Indus PKRs (100,000) 65,000 30,000 30,000 10,000 Project Neelam PKRs (100,000) 35,000 35,000 35,000 35,000 Max Marks 12 Calculate for each project; NPV, IRR, Profitability Index and Payback. (Marks 08) Which Project should be accepted if these projects are independent of each other (Marks 01) Which Project should be accepted if these projects are mutually exclusive. (Marks 01) Q.No. 3 Estimated Time To Complete Question (30 Minutes) You are a Finance Manager of SBK Pharma Ltd. The Director Finance has asked you to analyze two proposed capital investments, Project Indus and Project Neelam. Each project has a cost of PKR 100,000, and the cost of capital for each is 12%. The projects' expected net cash flows are as follows Year 01234 Required: A) B) Expected Net Cash Flows Project Indus PKRs (100,000) 65,000 30,000 30,000 10,000 Project Neelam PKRs (100,000) 35,000 35,000 35,000 35,000 Max Marks 12 Calculate for each project; NPV, IRR, Profitability Index and Payback. (Marks 08) Which Project should be accepted if these projects are independent of each other (Marks 01) Which Project should be accepted if these projects are mutually exclusive. (Marks 01)

Answer rating: 100% (QA)

Solution A Calculation of NPV IRR Profitability Index and Payback for each project Project Indus 1 N... View the full answer