DSC1630 ASSIGNMENT 4 SEMESTER 1 2023

DSC1630
ASSIGNMENT 4 SEMESTER 1 2023

, QUESTION 1

An investment with an initial outlay of R500 000 generates five successive
annual cash inflows of R75 000, R190 000, R40 000, R150 000 and R180 000
respectively. The internal rate of return (IRR) is

A. 7,78%.
B. 27,0%.
C. 9,48%.
D. 21,3%.
E. none of the above.


QUESTION 2

You must choose between two investments, X and Y. The profitability index
(PI), net present value (NPV) and internal rate of return (IRR) of the two
investments are as follows:


Which investment(s) should you choose, taking all the above criteria into
consideration, if the cost Of capital is equal to 12% per year?

A. X
B. Y
C. Both X and Y


QUESTON 3

The following table represents the annual income (after tax) of an investment:

If the average rate of return is 8,421%, then the original investment (rounded off
to the nearest thousand rand) was

A. R2 400 000.
B. R4 750 000.
C. R40 000.
D. R1 497 000.
E. none of the above.

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