In: Accounting
As a financial manager of limited enterprises, you are required to analyse two proposed capital investment , Project 1 and 2. Each has a cost of R100 000, and the cost of capital for each project is 12%. Depreciation on each project is estimated at R25 000 per year. The project’s expected profit are as follows.
Year Project 1 Project2
1 R40 000 R 10 000
2 R5 000 R 10 000
3 R 5 000 R 10 000
4 (R15 000) R 10 000
Required