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[Solved] ACC501 Assignment 1 Solution & Discussion Fall 2019  

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admin
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23/01/2020 1:09 am  

ACC501 BUSINESS FINANCE Assignment 1 Solution & Discussion Fall 2019


BUSINESS FINANCE (ACC501)

ASSIGNMENT NO. 01

DUE DATE: JANUARY 27, 2020                    MARKS: 20

 

LEARNING OBJECTIVES:

After attempting this assignment, the students will be able to:

  • Evaluate any proposed project by using different capital budgeting
  • Understand the difference between NPV and
  • Derive inferences regarding the acceptance/rejections of the

 

ASSIGNMENT:

Alfa Corporation has identified the following two mutually exclusive projects. The CFO of the company wants to evaluate the identified projects. For this purpose he asked Mr. Naveed to evaluate those projects and establish their feasibility with the help of different capital budgeting techniques. Following are the details of the two mutually exclusive projects.

Period

Project A

(Rs.)

Project B

(Rs.)

0

-42,000

-42,000

1

25,000

15,000

2

21,000

17,000

3

15,000

23,000

4

11,000

27,000

As per the company policy, Mr. Naveed decided to evaluate both projects with the help of IRR and NPV techniques of capital budgeting.

 

Requirements: 

  1. What is the IRR for each of these projects? Which project company should accept according to IRR rule? (13 Marks)
  2. What is the NPV for each of these projects? If the required rate of return is 12 percent. Which project company should accept according to NPV rule? (5 Marks)
  3. If the decision on the basis of NPV is different than that of IRR, which particular criteria company should prefer and why? (2 Marks)

 

IMPORTANT INSTRUCTIONS:

  • Complete calculations are required for every part of the problem. Incomplete calculations will result in loss of
  • Discount factors and resulting figures should not be rounded up more than four decimal

 

IMPORTANT:

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  • It is cheated or copied from other students, internet, books, journals

 

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admin
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23/01/2020 1:10 am  

ACC501 BUSINESS FINANCE Assignment 1 Solution & Discussion Fall 2019


 

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afsah
(@afsah)
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Joined: 1 month ago
Posts: 1
25/01/2020 1:12 pm  

please need its solution ?


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admin
(@admin)
Admin
Joined: 1 year ago
Posts: 2359
25/01/2020 10:02 pm  

ACC501 BUSINESS FINANCE Assignment 1 Solution & Discussion Fall 2019


@afsah

 

Download attachment for solution file of ACC501.

ACC501_1_Solution Fall 19.PDF (133 downloads)

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kausar ali khan
(@kausar-ali-khan)
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Joined: 1 month ago
Posts: 1
26/01/2020 12:39 am  

@admin

IRR rate will always be in between the rates we take in Interpolation formula the IRR rate in both the project  is wrongly calculated as 48% or some thing. The correct IRR is around 30%. 


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zaraasif
(@zaraasif)
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Joined: 1 month ago
Posts: 2
26/01/2020 9:25 pm  

@kausar-ali-khan

Do you have the solution?


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zaraasif
(@zaraasif)
New Member
Joined: 1 month ago
Posts: 2
26/01/2020 9:26 pm  

@admin

How to calculate the IRR?


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