2.2. Glens Ltd has a choice of investing in one of the two projects. The...
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2.2. Glens Ltd has a choice of investing in one of the two projects. The following details relate to these projects: Project A Project B R75 000 6 years 12% R75 000 6 years 12% Investment required Expected Economic lifetime Minimum required return of return Net annual cash inflows 1st year 2 st year 3st year 4st year 5st year 6st year R20 000,00 R20 000,00 R25 000,00 R24 000,00 R30 000,00 R32 000,00 R24 000,00 R24 000,00 R24 000,00 R24 000,00 R24 000,00 R24 000,00 REQUIRED 2.2.1 Use the Net Present Value method to determine which project Glens Ltd should choose. (8) 2.2.2 Assume the initial outlay has increased to R95 000. Calculate the internal rate of return for Project B. (6)
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