The following data relate to two investment projects, only one of which may be selected Initial capital expenditure Profit per year: Project Luthuli R'000 45 000 Project Madiba R'000 45 000 Year 1 Year 2 Year 3 Year 4 Expected resale value at end of year 4 22 500 9 000 18 000 13 500 9 000 21 500 9 000 23 500 9 000 0 Note: Profit is calculated after deducting straight-line depreciation The cost of capital is 15%
The following data relate to two investment projects, only one of which may be selected Initial capital expenditure Profit per year: Project Luthuli R'000 45 000 Project Madiba R'000 45 000 Year 1 Year 2 Year 3 Year 4 Expected resale value at end of year 4 22 500 9 000 18 000 13 500 9 000 21 500 9 000 23 500 9 000 0 Note: Profit is calculated after deducting straight-line depreciation The cost of capital is 15%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Calculate the payback period for both projects each (year, month and days).
3.2 Calculate the accounting
3.3 Use the
3.4 Briefly discuss the merits of using the NPV method
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