1. The method of determining at is subjective and is likely to differ from project to project.
2. The forecaster, expecting the reduction that will be made to his forecasts, may inflate them in anticipation.
3. When forecasts have to pass through several layers of management, the effect may be to greatly exaggerate the original forecast or to make it ultra conservative.
Kavungya answered the question on April 13, 2021 at 09:18
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Date posted: April 13, 2021. Answers (1)
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Year Cash flow
1 12,000
2 14,000
3 10,000
4 6,000
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α0 = 1.00
α1 = 0.90
α2 = 0.70
α3 = 0.50
α4 = 0.30
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Date posted: April 13, 2021. Answers (1)
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flow value
Sh`000' Sh`000'
0 (4,800) 4,800
1 2,000 3,000
2 1,875 1,900
3 1,750 0
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Determine when to abandon the project assuming a discount rate of 10%.
Date posted: April 13, 2021. Answers (1)
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Required:
Calculate for each project
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Date posted: April 13, 2021. Answers (1)
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Required:
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Date posted: April 13, 2021. Answers (1)
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