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Abandon the project assuming a discount rate

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Reference no: EM131114358

Project A has the following cash flows 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%.

Reference no: EM131114358

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