you are requested to advise him which proposal he should preferkeeping in mind t
ID: 2662073 • Letter: Y
Question
you are requested to advise him which proposal he should preferkeeping in mind the NPV analysis. Support your decision withnecessary calculation.
Proposal 1:
This proposal is for the period of 4 years i.e. 2009 to 2012 andthe initial investment is Rs. 5000. Cash inflows are givenbelow:
Year
Cash inflows (Rs.)
2009
2000
2010
3000
2011
4000
2012
3000
Proposal 2:
Other option is to invest Rs. 3000 in XYZ Corporation in theyear 2009 which will provide him a steady cash inflow of Rs. 1000for 4 years (year 2009-2012).
And the remaining Rs. 2000 in ABC Corporation in the year 2009which will provide him a steady cash inflow of Rs. 2000 for 4 years(year 2009-2012).
Whereas, the commercial banks provide 10% return on PLS savingaccount.
you are requested to advise him which proposal he should preferkeeping in mind the NPV analysis. Support your decision withnecessary calculation.
Proposal 1:
This proposal is for the period of 4 years i.e. 2009 to 2012 andthe initial investment is Rs. 5000. Cash inflows are givenbelow:
Year
Cash inflows (Rs.)
2009
2000
2010
3000
2011
4000
2012
3000
Proposal 2:
Other option is to invest Rs. 3000 in XYZ Corporation in theyear 2009 which will provide him a steady cash inflow of Rs. 1000for 4 years (year 2009-2012).
And the remaining Rs. 2000 in ABC Corporation in the year 2009which will provide him a steady cash inflow of Rs. 2000 for 4 years(year 2009-2012).
Whereas, the commercial banks provide 10% return on PLS savingaccount.
Explanation / Answer
x.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.