FIN3701 ASSIGNMENT 1 SEMESTER 2 - 2024
UNIQUE NUMBER: 232195
DUE DATE: 20 AUGUST 2024
QUESTION 1.
REQUIRED:
1.1 Calculate the NPV for each of the three projects. (9 marks)
1.2 Calculate the annualised net present value (ANPV) of each machine.
1.3 Based on the NPV and IRR calcu...
1.1 Calculate the NPV for each of the three projects. (9 marks)
NPV Calculation:
a. Machine A: NPV = (𝑅42 663.11)
b. Machine B: NPV = 𝑅6 646.58
c. Machine C: NPV = (𝑅3 160.52)
1.2 Calculate the annualised net present value (ANPV) of each machine. (9 marks)
ANPV Calculation:
a. Machine A: ANPV = 𝑅10 377.79 ≈ (𝑅10 378)
b. Machine B: ANPV = 𝑅2 188.53 ≈ 𝑅2 189
c. Machine C: ANPV = 𝑅876.76 ≈ (𝑅877)
1.3 Based on the NPV and IRR calculated above, would you advise Batlokwa (Pty) Ltd to
invest their funds in the replacement? Give a reason for your answer. (2 marks)
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