Exam Q's Unit 3 - Investment Appraisal

The initial investment is £5,000. In the first year the firm paid back £1,000 in the second year £2,000 and the third year 3,000. Calculate the payback period in years and months. (example of how to input answer 2 years and 5 months)

(a)  

A manufacturing firm is considering investing £ 500,000 in new machinery. The equipment is expected to increase the firm's cash flow by £ 150,000 per year. State the payback in years and months (example of how to input answer 2 years and 5 months)

After 1 year, the cash flow will be £ 150,000.

After 2 years, the cash flow will be £ 300,000.

After 3 years, the cash flow will be £ 450,000

(a)  

The Initial Outlay is £100 000 what is the ARR for Project A? (Answer to 2 decimal places e.g. 19.86%)

(a)  

The Initial Outlay is £100 000 what is the ARR for Project B?(Answer to 2 decimal places e.g. 5.58%)

(a)  

The Initial Outlay is £100 000 what is the ARR for Project C?

(a)  

Using the data in Table 3 calculate the NPV (Do answer to 1 decimal place)(Example £31.6m)

(a)  

Using the data in Table 3 calculate the Payback (Put answer to 1 decimal point e.g. 3 years and 5.8 months)

(a)  

Using the provided information calculate the ARR (Put answer to one decimal place e.g. 13.8%)

(a)  

Using the information calculate the ARR (If required round answer up to the nearest whole number e.g. 15%)

(a)  

Using the information calculate the Payback (Put answer to 2 decimal point2 e.g. 3 years and 5.86 months)

(a)