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Britneylim wrote:Hi, I got the exact same questions as you for Section C, Project E- has the operating profits written, I remember my NPV was positive $ 4700+ ish, and ROCE more 20% Project M’s NPV was $ 10000+ ish, and ROCE lesser than 20%. The investment criteria stated that the project has to satisfy ROCE of 20% over and have positive NPV at cost of capital of 10%. The 2nd part of question was to ask which investment project to take, I wrote only Project E since it satisfy both the investment criteria, but I also wrote that general NPV rule was to take any positive NPV project, especially one that is higher NPV. ( I remember reading that capital was not rationed.) For factoring costs, I think I messed up my calculations as well. Is this what you get as well? What do you remember about Section C questions?
Hi, I got the exact same questions as you for Section C, Project E- has the operating profits written, I remember my NPV was positive $ 4700+ ish, and ROCE more 20% Project M’s NPV was $ 10000+ ish, and ROCE lesser than 20%. The investment criteria stated that the project has to satisfy ROCE of 20% over and have positive NPV at cost of capital of 10%. The 2nd part of question was to ask which investment project to take, I wrote only Project E since it satisfy both the investment criteria, but I also wrote that general NPV rule was to take any positive NPV project, especially one that is higher NPV. ( I remember reading that capital was not rationed.) For factoring costs, I think I messed up my calculations as well. Is this what you get as well? What do you remember about Section C questions?