Q1. ABC Corporation approached you to advise them on a number of projects that they are considering undertaking. 1. The

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Q1 Abc Corporation Approached You To Advise Them On A Number Of Projects That They Are Considering Undertaking 1 The 1 (65.84 KiB) Viewed 59 times

Q1. ABC Corporation approached you to advise them on a number of projects that they are considering undertaking. 1. The initial outlay or cost of project A is $1,200,000 for a four-year project. The respective future cash inflows for years 1, 2, 3 and 4 are: $500,000, $500,000, $500,000 and $500,000. Calculate the payback period.(lmarks) 2. The initial outlay or cost of Project B is $1,400,000 for a four-year project. The respective future cash inflows for years 1, 2, 3 and 4 are: $400,000, $500,000, $600,000 and $600,000. Calculate the NPV if the cost of capital is 12%?(2 marks) . Calculate the NPV of the project.(A) Calculate the Profitability Index (B) Do you accept the project based on the NPV (Yes or No), Explain [C]