# Internal Rate of Return Assignment

## Internal Rate of Return Assignment

Dolby Enterprises has the option to invest in machinery in Projects M and N but finance is only available to invest in one of them. QUESTIONS [20 MARKS] Dolby Enterprises has the option to invest in machinery in Projects M and N but finance is only available to invest in one of them. Project M (R) Project N (R) 450 000 Initial cost 450 000 69 000 69 000 Net Profit: Year 1 Year 2 Year 3 Year 4 Year 5 36 000 75 000 102 000 129 000 81 000 69 000 69 000 69 000

Internal Rate of Return Assignment

Get Accounting homework help today from Contentmart.

1. Assume that all cash flows take place at the end of the year except the original investment in the project which takes place at the beginning of the project. 2. Project M machinery is expected to be disposed of at the end of year 5 with a scrap value of R60 000. 3. Project N machinery is expected to be disposed of at the end of year 5 with a nil scrap value 4. Depreciation is calculated on a straight-line basis. 5. The discount rate to be used by the company is 12% 5.1 Required: Use the information provided above by Dolby Enterprises to answer the following questions: 5.1.1 Calculate the Payback period of Project N. (Answer must be expressed in years and months.)

(3) 5.1.2 Calculate the Accounting Rate of Return (on average investment) of Project M. (Answer must be expressed to two decimal places) (4) 5.1.3 Calculate the Net Present Value of each project. (Round off amounts to the nearest Rand.) (6) 5.1.4 Using your answers from question 5.1.3, which project should be chosen? Why? (2) 5.2 A machine with a purchase price of R418 000 is estimated to eliminate manual operations and save the company R130 000 cash per year. The machine will last for 5 years and have no residual value at the end of its useful life. Required: Calculate the Internal Rate of Return (answer expressed to two decimal places). (5)

Internal Rate of Return Assignment

Get Accounting homework help today from Contentmart.

Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

## Calculate the price of your order

Total price:
\$0.00

How it works?

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

## Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.