Better plc is comparing two mutually exclusive projects, whose details are given below. The company’s cost of capital is 12 per cent. Project A Project B £m £m Year 0 (150) (152) Year 1 40 80 Year 2 50 80 Year 3 60 50 Year 4 60 40 Year 5 80 30 (a). Using the net present value method, which project should be accepted? (b). Using the internal rate of return method, which project should be accepted? (c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I did my own calculation but i dont get the same answer. Could you show mw the calculation but not in excel please, i need the calculation by formula manually
Better plc is comparing two mutually exclusive projects, whose details are given below. The company’s cost of capital is 12 per cent. Project A Project B £m £m Year 0 (150) (152) Year 1 40 80 Year 2 50 80 Year 3 60 50 Year 4 60 40 Year 5 80 30 (a). Using the net present value method, which project should be accepted? (b). Using the internal rate of return method, which project should be accepted? (c). If the cost of capital increases to 20 per cent in year 5, would your advice change? Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel. I did my own calculation but i dont get the same answer. Could you show mw the calculation but not in excel please, i need the calculation by formula manually
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 15P
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Question
Better plc is comparing two mutually exclusive projects, whose details are given below.
The company’s cost of capital is 12 per cent.
Project A Project B
£m £m
Year 0 (150) (152)
Year 1 40 80
Year 2 50 80
Year 3 60 50
Year 4 60 40
Year 5 80 30
(a). Using the
(b). Using the
(c). If the cost of capital increases to 20 per cent in year 5, would your advice change?
Hello.i have the solution you send me but i am trying to understand where did you get the calculations for in the worknotes tabel.
I did my own calculation but i dont get the same answer.
Could you show mw the calculation but not in excel please, i need the calculation by formula manually
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