investment appraisal, Financial Accounting

Assignment Help:
The business is considering two proposals for their promotions of the professional courses.Proposal one could give a stable return throughout the period. Proposal Two would give higher return only in initial years.


Proposal 1 Proposal - 2
Initial Cost (2,000,000) (2,000,000)
Cash flow Y1 350,000 2,180,000
Y2 800,000 100,000
Y3 900,000 100,000
Y4 750,000 40,000
Y5 200,000 30,000


The Marketing director thinks that the proposal with the highest Net Present Value (NPV) should be chosen where as the sales director thinks that the one with the highest internal rate of Return (IRR) should be undertaken, especially as both proposals have the same initial outlay and length of life. The company anticipates a cost of capital of 10% .
Calculate the following
• Payback period
• Net present Value
• Internal Rate of Return

What are the advantages of each method.

Related Discussions:- investment appraisal

Compute the maximum profit, Question: Vinak Ltd., which produces three ...

Question: Vinak Ltd., which produces three products provides you the following data for 2008-2009.

Compute debt-equity ratio., Allie forms Broadbill Corporation by transferr...

Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of $375,000. One month prior to incorporat

4 page assignment, How do I know how much is service fee ?

How do I know how much is service fee ?

Make journal entries required to dispose off, make journal entries require...

make journal entries required to dispose off over or under applied manufacturing overhead assuming it is allocated among work in process, finished goods and cost of goods sold ba

Effects of the appointment of the receiver-bankruptcy, Effects of the appoi...

Effects of the appointment of the receiver Floating charges: these crystallise on the appointment of a receiver and become fixed on the assets then in the hands of the compan

structural programming languages in industry today, Write  the advantages ...

Write  the advantages and drawbacks of both the structured and object-oriented (OO) paradigm in programming. Describe the perceived preference of OO languages over the more structu

Present value.., natasha kingrey to calculate present value of salary diffe...

natasha kingrey to calculate present value of salary differential for completing mba

Determine the net worth of personal assets, Igor and Angela were married in...

Igor and Angela were married in 2005, separated in 2011, and divorced recently. At the time of marriage, each had some investments and personal assets. They both worked during the

Significant findings or issues, Significant Findings or Issues - Substanti...

Significant Findings or Issues - Substantive matters which are vital to procedures performed, conclusions reached or evidence obtained and include though aren't limited to: 1.

Write Your Message!

Captcha
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!

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