Get premium membership and access questions with answers, video lessons as well as revision papers.

Dynamic Plc intends to invest in project Y which is expected to generate the following cash flows: Cash flows Year ...

      

Dynamic Plc intends to invest in project Y which is expected to generate the following cash flows:
Cash flows
Year Sh.
0 -100,000
1 20,000
2 30,000
3 40,000
4 50,000
5 30,000

Additional information:
1. The cost of capital is 12% per annum
2. The acceptable discounted payback period for Dynamic Plc is 3 years

Required:
Advise the management of Dynamic Plc on whether to invest in project Y using the following methods:
(i) Net present value (NPV).
(ii) Profitability index.
(iii) Discounted payback period.

  

Answers


Francis
Cap 7.JPG

Cap 8.JPG
francis1897 answered the question on November 7, 2022 at 09:18


Next: Explain three principles of Islamic finance.
Previous: Propose four challenges faced by small and medium sized enterprises (SMEs) in raising capital.

View More ATD Fundamentals of Finance Questions and Answers | Return to Questions Index


Learn High School English on YouTube

Related Questions