QUESTION 4 REQUIRED Use the information provided below to calculate the following: 4.1 Payback Period of Project B (answer expressed in years). 4.2 Return on investment of Project A (answer expressed to two decimal places). 4.3 Net Present Value of both projects. 4.4 Internal Rate of Return of Project B (answer expressed to two decimal places). INFORMATION The following information relates to two capital expenditure projects. Because of capital rationing, only one project can be accepted. Initial cost Expected life Project A R1 000 000 5 years Project B R1 000 000 5 years Scrap value (not included in the figures below) R20 000 0. Average annual profit R92 000 R90 000 Expected net cash inflows: R End of year: 1. 240 000 290 000 260 000 290 000 3 280 000 290 000 4 360 000 290 000 5 300 000 290 000 The company estimates that its cost of capital is 12%.

QUESTION 4 REQUIRED Use the information provided below to calculate the following: 4.1 Payback Period of Project B (answer expressed in years). 4.2 Return on investment of Project A (answer expressed to two decimal places). 4.3 Net Present Value of both projects. 4.4 Internal Rate of Return of Project B (answer expressed to two decimal places). INFORMATION The following information relates to two capital expenditure projects. Because of capital rationing, only one project can be accepted. Initial cost Expected life Project A R1 000 000 5 years Project B R1 000 000 5 years Scrap value (not included in the figures below) R20 000 0. Average annual profit R92 000 R90 000 Expected net cash inflows: R End of year: 1. 240 000 290 000 260 000 290 000 3 280 000 290 000 4 360 000 290 000 5 300 000 290 000 The company estimates that its cost of capital is 12%.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 15.3.3P

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Please help answer From Question 3.1 to 3.5 REQUIREDStudy the information provided below and calculate the following:3.1 Payback Period of Project A (answer expressed in years, months and days). 3.2 Accounting Rate of Return (on average investment) of Project B (answer expressed totwo decimal places).3.3 Net Present Value of both projets (amounts rounded off to the nearest Rand). 3.4 Benefit Cost Ratio of Project A (answer expressed to three decimal places). 3.5 Internal Rate of Return of Project B (answer expressed to two decimal places). INFORMATIONThe following information relates to two possible capital expenditure projects being considered by EdamLtd. Because of capital rationing, only one project can be accepted.Project A Project BInitial cost R800 000 R800 000Expected useful life 5 years 5 yearsAverage annual profit R80 000 R80 000Expected net cash inflows: R RYear 1 240 000 240 000Year 2 260 000 240 000Year 3 280 000 240 000Year 4 220 000 240 000Year 5 200 000 240 000The…
1. Accounting Rate of Return on average investment of Project A (expressed to twodecimal places). 1.2 Net Present Value of both projects. 1.3 Internal Rate of Return of Project B (expressed to two decimal places) usinginterpolation
Question The following economical indictors are referring to types of project (A and B). Answer the following points according to these given indictors in the tables. project A:r=8% project B: r=8% year cash flow (CF) year cash flow (CF) 0 -598 0 -384 1 110 1 105 2 170 2 105 3 210 3 95 4 320 4 118 A) If you are aware that( r%) percentages are various for different reasons to be (10% and 20%). So determine level of NPV during your analysis procedures for whole the mentioned cases of (% r) for each project? B) Which one of the mentioned project are more economically by using concept of IRR and take the range of (% r) between (9% to %25) for supporting your answers? C) Drawing out all the levels of various of the project for each cases of (r %) which given initially in point (A) above. D) Give clear justification about any of the above project more feasible?
REQUIRED Use the information provided below to calculate the following: 5.1 Payback Period of both projects (expressed in years, months and days). 5.2 Accounting Rate of Return (on initial investment) of Project Spik (expressed to two decima places). 5.3 Net Present Value of both projects. 5.4 Internal Rate of Return of Project Spik (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. INFORMATION Telco Ltd had to choose between purchasing machinery for two projects, Spik and Span, for which the following profits are forecast: Year 1 2 3 4 Spik R70 000 R70 000 R70 000 R70 000 Span R20 000 R60 000 R120 000 R70 000 Each project requires an investment of R800 000. Project Span is expected to have a scrap value of R40 000. The cost of capital is 12%. The straight-line method of depreciation is used. Ignore taxes.
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Net present value method, present value index, and analysis for a service company First United Bank Inc. is evaluating three capital investment projects by using the net present value method. Relevant data related to the projects are summarized as follows: Instructions 1. Assuming that the desired rate of return is 15%, prepare a net present value analysis for each project. Use the present value table appearing in Exhibit 2 of this chapter. 2. Determine a present value index for each project. (Round to two decimal places.) 3. Which project offers the largest amount of present value per dollar of investment? Explain.
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