REQUIRED Use the information provided below to calculate the following: 5.1 Payback Period of both...
80.2K
Verified Solution
Link Copied!
Question
Accounting
REQUIRED Use the information provided below to calculate the following: 5.1 Payback Period of both projects (expressed in years, months and days). (6 marks) 5.2 Accounting Rate of Return (on initial investment) of Project Spik (expressed to two decimal places). ( 3 marks) 5.3 Net Present Value of both projects. (6 marks) 5.4 Internal Rate of Return of Project Spik (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. (5 marks) INFORMATION Telco Lid had to choose between purchasing machinery for two projects, Spik and Span, for which the following profits are forecast: Each project requires an investment of R800 000. Project Span is expected to have a scrap value of R40 000 . The cost of capital is 12%. The straight-line method of depreciation is used. Ignore taxes
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
REQUIRED Use the information provided below to calculate the following: 5.1 Payback Period of both projects (expressed in years, months and days). (6 marks) 5.2 Accounting Rate of Return (on initial investment) of Project Spik (expressed to two decimal places). ( 3 marks) 5.3 Net Present Value of both projects. (6 marks) 5.4 Internal Rate of Return of Project Spik (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. (5 marks) INFORMATION Telco Lid had to choose between purchasing machinery for two projects, Spik and Span, for which the following profits are forecast: Each project requires an investment of R800 000. Project Span is expected to have a scrap value of R40 000 . The cost of capital is 12%. The straight-line method of depreciation is used. Ignore taxes 