What is the IRR for both PHD and Short courses programmes?

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 7PA: There are two projects under consideration by the Rainbow factory. Each of the projects will require...
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What is the IRR for both PHD and Short courses programmes? 

SCIS is evaluating two programmes. Both programmes will require an initial investment of
GH 1,300,000. Funds available to SCIS can support only one of the two programmes. The
expected cash flows of the two programmes are as follows:
Period
PHD
SHORT COURSES
(GH)
(GHC)
1
176,000
528,000
2
308,000
528,000
3
330,000
250,000
4
532,400
242,000
750,200
132,000
6
363,000
132,000
266,200
462,000
9
The required rate of return/opportunity cost of capital of SCIS is 20 per cent.
-5
Transcribed Image Text:SCIS is evaluating two programmes. Both programmes will require an initial investment of GH 1,300,000. Funds available to SCIS can support only one of the two programmes. The expected cash flows of the two programmes are as follows: Period PHD SHORT COURSES (GH) (GHC) 1 176,000 528,000 2 308,000 528,000 3 330,000 250,000 4 532,400 242,000 750,200 132,000 6 363,000 132,000 266,200 462,000 9 The required rate of return/opportunity cost of capital of SCIS is 20 per cent. -5
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