QUESTION 4:
Capital Investment Appraisal Techniques
X construction is considering two projects to develop. The
estimated net cash flow from each
project is as follows:
Project X Project Y
Year 1 110,000 75,000
Year 2 65,000 150,000
Year 3 100,000 60,000
Year 4 115,000 55,000
Year 5 35,000 60,000
Project requires an investment of $200,000. A rate of 15% has been
selected for the NPV
analysis.
Requires to
a) Calculate Payback period, ARR, Net Present Value and
Profitability Index
b)...