Accounting and Decision Making Techniques 2

Accounting and Decision Making Techniques Answer 1 Pay pole =no(prenominal) of years before Remaining to be give back at the start of payback Final payback year+ year, to dumbfound cumulative coin flow 0 . Total paid back in the entire payback year aim 1:Payback= 3 + 27 73 = 3 + 0.370 = 3.370 Years = 3 years and 4.44 months (where, Months= 0.370 * 12 = 4.44 months) Since the cash flows are same in all the sojourn of proposals, the payback= Initial Investment / Annual Cash Flow | proposition 2 |£1,80,000 / £66,000 |= 2.727 |2 years and 8.72 months | | plan 3 |£2,00,000 / £1,45,000 |= 1.379 |1 year and 4.55 months | |Proposal 4 |£40,000 / £16,000 |= 2.500 |2 years and 6 months | |Proposal 5 |£70,000 / £70,000 |= 1.000 |1 year | Net exhibit Value (NPV) (@ 10%): Cash Flow of the year * annuity Rate (Here, Annuity rates are taken because the cash flows are same in all the proposals)- Initial Investment |Proposal 1 |[£73,000 * (3.791 - 1.

736)] - £1,00,000 |£50,015 | |Proposal 2 |(£66,000 * 3.791) - £1,80,000 |£70,204 | |Proposal 3 |(£1,45,000 * 1.736) - £2,00,000 |£51,720 | |Proposal 4 |(£16,000 * 3.791) - £40,000 |£20,656 | |Proposal 5 |(£70,000 * 3.791) - £70,000... If you want to get a full essay, order it on our website: Orderessay

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