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1 markInvestment Appraisal

CAPE Management of Business Unit 1 · 2008 · Paper 2 · Question 5(b)

Indicate which project the company should invest in, based on the payback method.

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Other parts of this question

  1. 5(a)Calculate the payback period and the net present value for EACH project.[21 marks]
  2. 5(c)Indicate which project the company should NOT consider investing in, using the net present value (NPV).[1 mark]
  3. 5(d)Outline ONE advantage that the NPV method has over the payback method.[2 marks]

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