Reference no: EM131926168
Idwala Carbonates group of companies located in Port Shepstone in the South Coast (KwaZulu-Natal) is considering which of two mutually exclusive projects to accept, each with a five-year life.
These projects are aimed at increasing the production capacity for limestone to boost the supply of this material to Eskom's Kusile Power Station in Mpumalanga.
Project A requires an initial expenditure of R2 300 000 and is forecast to generate annual cash flows before depreciation of R800 000.
The equipment purchased at time zero has an estimated residual value after five years of R300 000. Project B costs R660 000 for equipment at the start. This has a residual value of R60 000 after five years. Cash inflows before depreciation of R250 000 per annum are anticipated.
The company has a straight-line depreciation policy and a cost of capital of 15 per cent (relevant for projects of this risk class).
You can assume that the cash flows are also equal to the profits before depreciation.
Calculate:
3.1. An accounting rate of return. (6)
3.2. The net present value. (6)
3.3. What are the disadvantages of using ARR. (5)
What will be the total freight charged
: The truck can hold up to 900 pounds of cargo in a 2,500-cubic-foot space. What cargo should be loaded, and what will be the total freight charged?
|
How would you evaluate their performance
: Imagine you have been tasked with evaluating a portfolio manager. How would you evaluate their performance?
|
What is the expected price of the stock
: GM is expected to grow at 12% in year 1, 11% in years 2 and 3, 8 % in year 4 and then grow at a constant rate of 5% in the years that follow.
|
How much would you be willing to pay in given conditions
: You are willing to pay $25,000 now to purchase a perpetuity which will pay you and your heirs $2,200 each year, forever, starting at the end of this year.
|
What are the disadvantages of using arr
: These projects are aimed at increasing the production capacity for limestone to boost the supply of this material to Eskom's Kusile Power Station in Mpumalanga.
|
How many and what type of agents should be hired
: How many and what type of agents should hired for each shift to meet language and staffing requirements for airline, so that total number of agent is minimized?
|
Contain electron deficient inner atoms
: In contrast, the three fluorides CF4, NF3, and SF6 do not react with lithium fluoride. Explain by selecting all that apply.
|
What is the annualized forward discount of the euro
: The 30-day forward rate for the euro is $1.05, while the current spot rate of the euro is $1.07. What is the annualized forward premium or discount of the euro?
|
The issue of the foreign policy decision making process
: The second paragraph should discuss how which of the International Relations Theories can be used to describe the problem, organization, and solution.
|