Question: Please answer the question as soon as possible Section A: Compulsory Question 1. Ultimate Ltd. a sausage producing company, intending to undertake a new project

Please answer the question as soon as possible Section A: Compulsory

Please answer the question as soon as possible

Section A: Compulsory Question 1. Ultimate Ltd. a sausage producing company, intending to undertake a new project in 2021, required 280,000 of initial investment. The cost of capital for this project is estimated at 12% per annum A consultant of Ultimate Ltd. has come up with the following cash flow projections: Cashflows/Years 2022 2023 2024 2025 2026 2027 Cash inflows () 13,000 57,000 86,000 107,000 000 100 Cash outflows 48,000 52,000 47,000 58,000 58,000 72,000 () As the Finance Director of YY Ltd., you are required to: a) Appraise the proposed project using the Net Present Value (NPV) technique[25 Marks] b) Advice management on the financial viability of the project [5 Marks] c) Advice management on any other factors that need consideration. [10 Marks] Total [40 Marks]

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