UNITAR International University has the opportunity to invest RM400,000 in a new project. However, due to cash flow concerns, the CEO wants to know when can UNITAR earn back the initial investment. As UNITAR's business analyst, you have anticipated that the new project will generate inflows of RM57,000; RM70,000; RM100,000; RM150,000; and RM200,000 respectively for an expected FIVE (5) years after the completion of the project. Assuming that UNITAR's required rate of return is 10% and the inflation rate remains steady at 5%, answer below questions. (Round your answers into TWO (2) decimal places): a) Using the payback period method, determine the return of this project after FIVE (5) years.
UNITAR International University has the opportunity to invest RM400,000 in a new project. However, due to cash flow concerns, the CEO wants to know when can UNITAR earn back the initial investment. As UNITAR's business analyst, you have anticipated that the new project will generate inflows of RM57,000; RM70,000; RM100,000; RM150,000; and RM200,000 respectively for an expected FIVE (5) years after the completion of the project. Assuming that UNITAR's required rate of return is 10% and the inflation rate remains steady at 5%, answer below questions. (Round your answers into TWO (2) decimal places): a) Using the payback period method, determine the return of this project after FIVE (5) years.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6EA: The management of Kawneer North America is considering investing in a new facility and the following...
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