Question

Q2: BASF Group has opportunity to use the Retained Earnings (€42056: as shown in the balance...

Q2: BASF Group has opportunity to use the Retained Earnings (42056: as shown in the balance sheet 2019) to invest in new project, the following is the cash flow expected in the upcoming for years. (K: discounted rate: 13%)                                                                        

Year

Cost

Cash-In-Flow

0

42056

------

1

-----

10,000

2

-----

15,000

3

-----

17,000

4

-----

20,000

  • Calculate NPV net present value for this project, and give them an advice to invest or no, explain your answer?                                                                                       

Answer:                                                                                                       

Year

Cost

Cash-In-Flow

P.V.C.F

0

1

2

3

4

                                                                      Total P.V.C.F     =     =

NPV =                                                                                                                   (1 Mark)

Advise                                                                                                                  (1 Mark)

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Answer #1

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