User Account

All Pages

What is net present value will the project yield

Assignment Help Accounting Basics
Reference no: EM132720127

Question - Moodle Ltd has an investment, requiring an outlay of N$40,000. The investment proposal is expected to have 2 years economic life with no salvage value. In year 1, there is 0.4 probability that cash inflow after tax will be N$25,000 and 0.6 probability that cash inflow after tax will be N$30,000. The probabilities assigned and cash inflows after tax for the year 2 are as follows:

The cash inflow year 1

N$25,000

 

N$30,000

 

The cash inflow year 2

 

Probability

 

Probability

 

N$12,000

0.2

N$20,000

0.4

 

N$16,000

0.3

N$25,000

0.5

 

N$22,000

0.5

N$30,000

0.1

Moodle Ltd uses a 12% discount rate for this type of investment.

REQUIRED -

1. Construct a decision tree for the proposed investment project.

2. What is net present value of each outcome?

3. What is net present value will the project yield if worst outcome is realised and its probability of occurrence of the NPV?

4. What will be the best outcome and the probability of that occurrence?

5. Will the project be accepted?

Reference no: EM132720127

Questions Cloud

Investigate a complex conceptual issue : What is the power of big media and how has it changed given technological changes in the last twenty years - conceptual issue by critical and speculative
Define the main approaches and criticism of eudaemonism : Define the main approaches and criticism of eudaemonism. How is it applicable in relation to corporations and society
Identify reward systems : Can you identify reward systems that affect the level of effort students are likely to put forth in team or group projects? Should these reward systems be
Find and explain the major accounting treatments : Find and explain the major accounting treatments (company used in its financial statements in relation to MFRS 39 and subsequently MFRS 9)
What is net present value will the project yield : What is net present value will the project yield if worst outcome is realised and its probability of occurrence of the NPV? Will the project be accepted
Successful brainstorming session : What steps and actions do you need to make to have a successful brainstorming session? Include in your answer who should be part of the session as well as its l
Find what was total amount of interest paid over the term : Find What was the total amount of interest paid over the term? While buying a new car, George made a down payment of $900 and agreed to make month
What is novt mission : What is NOVT's mission? Scientific & Technical Instruments:NOVT | Novanta
Describe the importance of strategic leaders : Describe the importance of strategic leaders in managing a firm's resources. Does Mark Zuckerberg meet these performance standards?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Compute the break-even point in dollars under each of the

fredonia inc. had a bad year in 2013. for the first time in its history it operated at a loss. the companys income

  Compute the amount of gross profit to be recognized

The estimated cost to complete the contract is $4,221,360. Compute the amount of gross profit to be recognized for the year ended December 31, 2017

  Find out what the ip address

1. Your Windows 8 computer is DHCP enabled. You want to find out what the IP address is for it. How do you do this?

  Compute cost of goods sold using periodic inventory method

Compute cost of goods sold using the periodic inventory method. Inventory, beginning of the year $ 32. Inventory, end of the year 44

  Explain the flexible budget

A flexible budget shows fixed costs as constant amounts of cost per unit of activity.

  What were the total cash receipts

The Appliance Store began operations March 1, 2019. The firm sells its merchandise for cash and on open account. Sales are subject to a 6 percent sales tax.

  Should they extend the operation hour

Based on the above calculation, should they extend the operation hour for another 3 hours until 3 a.m? The similar incremental cost will occur

  Discuss how would you describe the operating leverage

How would you describe the operating leverage of your current or previous employer

  How create a document flowchart and what are the entities

You are documenting part of the sales process for Neverland Company. How create a document flowchart and what are the entities

  What was the operating profit or loss

What is the sale price at Kitchen Hut and what was the operating profit or loss

  Advantage of using standard costs

Which of the following is not considered an advantage of using standard costs?

  Refer to the information above

Refer to the information above. If the Notes Payable is $10,000, the December 31, 2014 cash balance is:$60,000.$20,000.$160,000.$30,000.

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