The following are the net cash flow estimates (in thousands of dollars) of the two (2) proposed projects, you are planning to invest in.                 Expected Net Cash Flow Year                                                                       Restaurant & Bar                                                             Hardware                                                                                                 $M                                                                                 $M 0                                                                                           (200)                                                                              (200) 1                                                                                                10                                                                                  70 2                                                                                               60                                                                                  50 3                                                                                            100                                                                                   40 4                                                                                            120                                                                                   80 5                                                                                              150                                                                                 100 Required: i)             What is capital budgeting?   ii)            Explain the difference between independent projects and mutually exclusive projects

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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The following are the net cash flow estimates (in thousands of dollars) of the two (2) proposed projects, you are planning to invest in.

                Expected Net Cash Flow

Year                                                                       Restaurant & Bar                                                             Hardware

                                                                                                $M                                                                                 $M

0                                                                                           (200)                                                                              (200)

1                                                                                                10                                                                                  70

2                                                                                               60                                                                                  50

3                                                                                            100                                                                                   40

4                                                                                            120                                                                                   80

5                                                                                              150                                                                                 100

Required:

i)             What is capital budgeting?

 

ii)            Explain the difference between independent projects and mutually exclusive projects

 

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