ABC Ltd is wondering whether or not to invest in one of two(2) possible projects. The initial investment will be $10,000

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Abc Ltd Is Wondering Whether Or Not To Invest In One Of Two 2 Possible Projects The Initial Investment Will Be 10 000 1 (30.62 KiB) Viewed 107 times

Abc Ltd Is Wondering Whether Or Not To Invest In One Of Two 2 Possible Projects The Initial Investment Will Be 10 000 2 (30.62 KiB) Viewed 107 times

ABC Ltd is wondering whether or not to invest in one of two(2) possible projects. The initial investment will be $10,000, and the cost of capital is 10 per cent. There is no scrap value for fixed assets used. Details of the net cash inflows are as follows: Project N Year Net Cash Flows Net Cash Flows 0 (10 000) (10 000) 1 5 000 4000 2 5000 5 000 3 2000 3000 4 600 1 1 000 $ 1 400 Required: Calculate for the two projects the : 1.) Payback period [4 marks) ii.) Accounting rate of return( assuming the cash flows represent profits) (4 marks) iii.) Net Present Value [6 marks) iv.) Internal Rate of Return. [6 marks) v.) Recommend which of the project to accept by the firm base on your [5 marks) assessment.