• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

June 2025 ACCA Exams

How was your exam? Comments & Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Investment Appraisal

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Investment Appraisal

  • This topic has 3 replies, 3 voices, and was last updated 1 year ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • April 22, 2023 at 9:46 am #683343
    Honsu
    Participant
    • Topics: 2
    • Replies: 1
    • ☆

    A company is considering a new project with a life of 15 years. It requires an initial
    investment of $5,000 payable immediately. In the first two years it will generate net cash inflow
    of $2,000 per year receivable at the end of each year. After that its net cash inflows will be
    $1,000 per year at the end of each of the next 13 years.
    The company s cost of capital is 12% per year. ’
    Task 1 6 marks
    Non-discounted payback period (to the nearest year) _______ years
    Net present value (to the nearest $100) $___________
    Discounted payback period (to the nearest year ________years

    For Non discounted payback I get three years and NPV is 8502-5000= 3502
    I am not sure about Discounted payback which i got was 5 years.
    Please help me on this>

    April 22, 2023 at 10:02 am #683348
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    Why are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers – it has answers and explanations.

    Your non-discounted payback period and your NPV are correct.

    The discounted payback period is calculated in exactly the same way as the non-discounted payback period except we use the discounted cash flows instead of the actual cash flows (as explained (with example) in my free lectures. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.

    June 19, 2023 at 12:30 pm #687228
    yuueee
    Participant
    • Topics: 0
    • Replies: 1
    • ☆

    how did you calculate NPV pls help

    June 19, 2023 at 3:42 pm #687239
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    The cash flows are a follows:

    0 (5,000)
    1 – 2 2,000 per year
    3 – 15 1,000 per year

    These flows are discounted at 12% p.a. in the way that is explained in my free lectures on this.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • poojam on Objective of financial reporting – ACCA Financial Reporting (FR)
  • mm3677 on IAS 16 Accounting for a revaluation – CIMA F1 Financial Reporting
  • Anastesia123 on MA Chapter 1 Questions Accounting for Management
  • John Moffat on MA Chapter 26 Questions Variance Analysis
  • acowtant on Changes in group structure – examples – ACCA SBR lectures

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in