- A company is considering two mutually exclusive projects requiring an initial cash outlay of Sh 10,000 each and with a useful life of 5 years....(Solved)
A company is considering two mutually exclusive projects requiring an initial cash outlay of Sh 10,000 each and with a useful life of 5 years. The company required rate of return is 10% and the appropriate corporate tax rate is 50%. The projects will be depreciated on a straight line basis. The before depreciation and taxes cash flows expected to be generated by the projects are as follows.
Required:
Calculate for each project
i. The payback period
ii. The average rate of return
iii. The net present value
iv. Profitability index
v. The internal rate of return
Which project should be accepted? Why?
Date posted: April 13, 2021. Answers (1)
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State and explain the two groups of investment appraisal techniques.
Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
- Two neighbouring countries have chosen to organize their electricity supply industries in different ways. In
country A, electricity supplies are provided by a nationalized industry. On...(Solved)
Two neighbouring countries have chosen to organize their electricity supply industries in different ways. In
country A, electricity supplies are provided by a nationalized industry. On the other hand in country B
electricity supplies are provided by a number of private sector companies.
Required:
(a) Explain how the objectives of the nationalized industry in country A might differ from those of the private sector companies in country B.
(b) Briefly discuss whether investment planning and appraisal techniques are likely to differ in the nationalized industry and private sector companies.
Date posted: April 13, 2021. Answers (1)
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Explain the forms of informational efficiency.
Date posted: April 13, 2021. Answers (1)
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State and explain three types of efficient market hypothesis.
Date posted: April 13, 2021. Answers (1)
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In which ways is corporate governance important?
Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
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Briefly describe the required rate of return (Ri).
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Date posted: June 27, 2019. Answers (1)
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What are the benefits and challenges with the implantation of a Material requirement planning (MRP) system?
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Date posted: February 12, 2019. Answers (1)
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Date posted: February 12, 2019. Answers (1)
- The following six have been submitted for inclusion in 1998 capital expenditure budget for
Limuru Ltd.(Solved)
The following six have been submitted for inclusion in 1998 capital expenditure budget for
Limuru Ltd.
Required:
(a) Rates of return (to the nearest half percent) for projects B, C and D and a ranking of all
projects in descending order.
b) Compute the payback reciprocal for projects B and C.
(c) Compute the N.P.V of each project using 16% as discount rate and rank all projects
Date posted: February 12, 2019. Answers (1)
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Identify the various methods of issuing new ordinary shares to shareholders.
Date posted: February 12, 2019. Answers (1)
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Why does ordinary share capital have a high cost relative to debt capital?
Date posted: February 12, 2019. Answers (1)