Question
Q 1. From the following information, calculate the net present value of the two project and...
Q 1. From the following information, calculate the net present value of the two project and suggest which of the two projects should be accepted.
|
Particulars |
Project X |
Project Y |
|
Investment |
400,000 dhs |
420,000 dhs |
|
Estimated Life |
4 years |
4 years |
|
Scrap Value |
60,000 dhs |
70,000 dhs |
The cash inflows are as follows:
|
Project Name |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
|
Project X |
90,000 |
120,000 |
140,000 |
70,000 |
|
Project Y |
80,000 |
148,000 |
98,000 |
60,000 |
Note: The following are the present value factors @ 10 % p.a.
|
Year |
1 |
2 |
3 |
4 |
|
Factor |
0.909 |
0.826 |
0.751 |
0.683 |
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