Swan plc. is considering two investment projects whose cash flows are shown below: Points in time (yearly interval) 1 2
Posted: Fri May 20, 2022 6:07 am
Swan plc. is considering two investment projects whose cash
flows are shown below:
Points in time (yearly interval) 1 2 3 4
Project A (£) -60,000 30,000
22,500 21,000 9,000
Project B (£) -60,000
7,500 22,500 27,500
30,000
The company’s required rate of return is 15% and two projects
are mututally exclusive.
b) Use the net present value (NPV) approach to advise the
company which project should be taken (if any).
flows are shown below:
Points in time (yearly interval) 1 2 3 4
Project A (£) -60,000 30,000
22,500 21,000 9,000
Project B (£) -60,000
7,500 22,500 27,500
30,000
The company’s required rate of return is 15% and two projects
are mututally exclusive.
b) Use the net present value (NPV) approach to advise the
company which project should be taken (if any).