FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
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![(c) Company AC Ltd contemplates to raise debt finance totaling Sh.1,000,000. It will be
required to pay an annual interest of 15%. The money can be invested in one of the
following projects A or B which will generate the following cash inflows;
Period
Project A
Project B
vif.
12345
200,000
500,000
2
150,000
400,000
300,000
300,000
400,000
300,000
5
500,000
150,000
You are required payback period method, Net present value method and task method.
Advice the management which project to invest in and why.
[20 marks]](https://content.bartleby.com/qna-images/question/a57bb05b-672d-481c-b18e-8ef7c02fd7ad/a46fdc57-4358-4282-8c9d-1ef63daacb9e/urw6nan_processed.jpeg)
Transcribed Image Text:(c) Company AC Ltd contemplates to raise debt finance totaling Sh.1,000,000. It will be
required to pay an annual interest of 15%. The money can be invested in one of the
following projects A or B which will generate the following cash inflows;
Period
Project A
Project B
vif.
12345
200,000
500,000
2
150,000
400,000
300,000
300,000
400,000
300,000
5
500,000
150,000
You are required payback period method, Net present value method and task method.
Advice the management which project to invest in and why.
[20 marks]
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