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Business, 24.02.2022 08:30 vale2652

XYZ Ltd. is a building construction company, intending to undertake a new project, required £395,875 of initial investment. The cost of capital for this project is estimated at 8% per annum.
A consultant of XYZ Ltd. has come up with the following
cash flow projections:
Cash flows/Years 2021 2022 2023 2024 2025 2026
Cash inflows (£) 12,560 52,960 110,250 210,000 252,000 301,250
Cash outflows (£) I 22,980 41,670 52,450 76,760 98,000 104,950

As the Finance Director of XYZ Ltd., you are required to:

A) Appraise the proposed project using the Net Present Value (NPV) technique.

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Answers: 2

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