Practical Session:
This is an individual activity, and short answer format is expected.
Answer the following questions:
1. Explain the relevance of capital budgeting is important for business?
2. What is the net present value rule? Analyse the statement for a business: “A particular investment has an NPV of $1,000”, what does that mean?
3. A business is anticipating the following Cash Flows and uses the NPV decision rule
The initial investment in a building $34,000
Y1 Rent $16,000
Y2 Rent $18,000
Y3 Rent $15,000
At a required return RRR of 11%, should the firm accept this project? and RRR 30%? Justify your answers.
Answer to be uploaded in VLE in the Due Date Nov 5th, 2023 11.59 CEST