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Posted: August 21st, 2020

Capital Investment Appraisal Measures Assignment | Homework For You

Required

a) Critically discuss the usefulness of the respective capital investment appraisal measures in the table above and make a recommendation as to which option should be chosen.

b) Both payback and net present value (NPV) measure the financial viability of capital projects. Suggest reasons why payback favours the G120 option and NPV the Z125 option in this case.

c) The IRR is quite difficult to calculate. Explain why the Finance Director was so confident that the IRR would be well in excess

d) At the management board meeting, the Technical Director produces details of a potential purchase of new engine build plant that would cost £2,080,000 with a NPV of £140,800. Discuss how this option would affect the capital investment decision to purchase either the G120 or Z125 machine. Finance homework help

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