User Account

All Pages

Find and calculate the net present value of the project

Assignment Help Financial Accounting
Reference no: EM132641939

Gandul Limited has the option to invest in Project XXX. The following information is available on the project: Project XXX

Project XXX

Investment                  R280,000
Scrap value                   Nil
Expected life               5 years
Cost of capital                      12%

               Expected after tax profits and cash flows           Profits Cash flows

                            End of: Rand                                                              Rand

Year 5                         23,000                                                79,000
Year 5                        26,000                                                82,000
Year 5                         40,000                                                96,000
Year 5                          43,000                                               99,000
Year 5                          14,000                                                70,000

Required:

Question 1: Calculate the accounting rate of return. (Two decimal places)

Question 2: Calculate the payback period. (In years, months and days)

Question 3: If the payback cut off is three years, should the project be chosen? Why?

Question 4: Calculate the net present value of the project. (Round off amounts to the nearest Rand.)

Question 5: Should the project be accepted on the basis of NPV? Why?

Reference no: EM132641939

Questions Cloud

Find what circumstances might a year notes payable maturing : Find what circumstances might a 5-year notes payable maturing 30 days after the balance sheet date be classified as a long-term liability?
Comment on responsibility centers and their functions : The organization is currently centralized, but is reviewing options to put a decentralized structure in place - comment on responsibility centers
Outcomes associated with social determinants of health : Name the 6 primary health outcomes associated with the social determinants of health?
Explain the rationale for selecting the country : Explain the rationale for selecting the country. Describe the social determinants of health in the country that you would need to address. Explain why you need.
Find and calculate the net present value of the project : How do Calculate the net present value of the project. (Round off amounts to the nearest Rand.) Calculate the payback period. (In years, months and days).
Importance of understanding the language of finance : Discuss the importance of understanding the language of Finance, such as EBITDA.
How cultural and economic factors influence : For this Discussion, you consider how cultural and economic factors influence those biologic mechanisms that can result in disease for specific segments.
What is the current price of annuity : If interest rates are 2.17% APR (compounded monthly) what is the current price of this annuity?
Find debt consolidation company : You currently have two loans outstanding: a car loan and a student loan. The car loan requires that you pay $443 per month, starting next month for 25 more mont

Reviews

Write a Review

Financial Accounting Questions & Answers

  Compute the inventory value of the units unsold

Compute the inventory value of the units unsold in the hands of the consignee. Compute the profit for the consignor for the units sold.

  Determine the recoverable amount of the land

On 1 July 2016 Big Wednesday Ltd acquired land at a cost of $1,000,000. Determine the recoverable amount of the land for each reporting date

  Compute the cost of goods sold

Assuming that the periodic inventory method is used, compute the cost of goods sold and ending inventory under (1) LIFO and (2) FIFO

  Distribution decisions are complicated

Based upon your understanding of the constraints on dividend payments, Identify the type of constraints this condition represents, other factors held constant

  Retail sales subject to sales tax

Multiple Choice Question 102 Valley, Inc., is a retail store operating in a state with a 5% retail sales tax. The state law provides that the retail sales tax collected during the month must be remitted to the state during the following month. On Apr..

  Estimate the inventory of goods on hand at close of business

Estimate the inventory of goods on hand at the close of business on March 11 by the gross profit method and determine the amount of the theft loss

  What is the complete disclosure in the direct method

A firm's dividends payable account increased $10,000 during the year. The firm also declared $35,000 of dividends. What is the complete disclosure in the direct method SCF for these events?

  How sales discounts is classified as

How Sales discounts is classified as a(n)? contra revenue account/ contra asset account/ liability account/ revenue account/expense account

  What should the size of the payments be for apex fabricating

What should the size of the payments be for Apex Fabricating? Apex Fabricating wants to accumulate $600,000 for an expansion expected to begin in four years.

  Defines the term best efforts underwriting

Defines the term best efforts underwriting. Underwriter sells as much of the issue as possible, but can return any unsold shares to the issuer without financial

  What is ending basis in his partnership interest

Coy and Matt are equal partners in the Matcoy Partnership. Each partner has a basis in his partnership interest of $28,000 at the end of the current year, prior to any distribution. On December 31, they each receive an operating distribution. Coy rec..

  Difference between managerial and financial accounting

Provide an alternative perspective on the difference between managerial and financial accounting and discuss an example related to managerial accounting, and offering examples of the importance of managers knowing and understanding managerial account..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd