A company has N$200 000 to be invested in either project X or project Y with the followingcash flows:year 1, Project X - 70000, Project Y-10000year 2, Project X - 70000, Project Y -30000year 3, Project X - 70000, Project Y -60000 year 4, Project X - 70000, Project Y - 132000year 5, Project X - 70000, Project Y - 40000The current cost of capital is 15%Requireda) Calculate for each project the:i. Simple payback period (6 marks)ii. Discounted payback period (10 marks)iii. Net present value (10 marks)iv. Internal rate of return (10 marks)v. Profitability index (8 marks)b) Based on your results in (a) above, advise the firm on which project to invest.(6 marks)NB: Please show your workings.
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