Acc501 Assignment 1 Solution Spring 2022, acc501 assignment 2 solution 2022, acc501 assignment solution 2022, acc501 assignment solution file.
Acc501 Assignment 1 Solution Spring 2022: As you know, the half term activities have started and the problem of load shedding is also prevalent in our country. Considering the fact, you all are advised to publish your activities as soon as possible without waiting for the due date. For your convenience; the schedule of activities is already uploaded to VULMS for the current semester, therefore there will be no excuse after the assignment, quiz or GDB deadline.
| Years | Proposal A | Proposal B | |
| 0 | Initial Investment | (2,500,000) | (2,000,000) |
| 1 | Cash Flows | 500,000 | 500,000 |
| 2 | Cash Flows | 550,000 | 550,000 |
| 3 | Cash Flows | 650,000 | 600,000 |
| 4 | Cash Flows | 750,000 | 750,000 |
| 5 | Cash Flows | 1250,000 | 800,000 |
Question:
Star Inc. is a business concern that deals with the production and export of leather products. To take advantage of the government’s new policy, the company plans to increase its production capacity by installing a new plant. To this end, they consider two mutually exclusive proposals, i.e. Proposal A and Proposal B. The estimated initial investment and associated cash flows of the proposals are given below:
- Calculate the payback period for each design
- Calculate the net present value (NPV) for each proposal
- Based on the payback period and NPV calculated above, suggest which proposal is more appropriate to choose.
Briefly discuss the appropriateness of IRR criteria in evaluating mutually exclusive projects.
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