1. It clearly brings out the implicit assumptions and calculations for all to see, so that they may be
questioned and revised.
2. The decision tree allows a decision maker to visualize assumptions and alternatives in graphic
form, which is usually much easier to understand than more abstract, analytical form.
Kavungya answered the question on April 13, 2021 at 09:59
- A project has the following cash flows
The projects initial cash outlay is Sh 100,000 with a cost of capital of 12%.
Required:
Determine:
(a) The projects expected monetary...(Solved)
A project has the following cash flows
The projects initial cash outlay is Sh 100,000 with a cost of capital of 12%.
Required:
Determine:
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(b) The projects NPV
Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
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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
Assume also that the certainty equivalent coefficients have been estimated as follows:
α0 = 1.00
α1 = 0.90
α2 = 0.70
α3 = 0.50
α4 = 0.30
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Required
Compute the NPV of the project
Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
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Project A has the following cashflows over its useful life of 3 years. The market value (Abandonment value) has also been given.
Year Cash Abandonment
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
Required:
Determine when to abandon the project assuming a discount rate of 10%.
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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Required:
Calculate for each project
i. The payback period
ii. The average rate of return
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iv. Profitability index
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Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)
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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
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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.
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Date posted: April 13, 2021. Answers (1)
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Date posted: April 13, 2021. Answers (1)