Question: Question 5. (12 Marks) Case 7. (6 Marks) The Chen Company proposes an investment in a new website that is estimated to cost AED 120,000.

 Question 5. (12 Marks) Case 7. (6 Marks) The Chen Company
proposes an investment in a new website that is estimated to cost

Question 5. (12 Marks) Case 7. (6 Marks) The Chen Company proposes an investment in a new website that is estimated to cost AED 120,000. The company has obtained offers from three suppliers A, B and C. The projected cash flows from each supplier are disclosed in the tables below: Cost Cash Inflow Year 1 -120,000 80,000 10,000 Year 2 Year 3 40,000 10,000 Year 4 B Cost -120,000 10,000 Cash Inflow Year 1 Year 2 Year 3 30,000 50,000 70,000 Year 4 Cost Cash Inflow Year 1 Year 2 -120,000 40,000 50,000 65,000 20,000 Year 3 Year 4 Required: Disclose which investment you would choose using the following methods: 1. (3 Marks) The Net present value of each investment using the present value interest factors of 8%. (Mutually DODOVINA INNAN Required: Disclose which investment you would choose using the following methods: 1. (3 Marks) The Net present value of each investment using the present value interest factors of 8%. (Mutually exclusive events). (Year 1= 0.9259, Year 2= 0.8573 Year 3= 0.7938 Year 4= 0.735). 2. (1.5 Marks) The Discounted payback period of each investment using the present value interest factors of 8% (Year 1= 0.9259, Year 2=0.8573 Year 3= 0.7938 Year 4= 0.735). 3. (1 Mark) The Payback period of each investment. 4. (.5 Mark) The profitability index of each investment

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