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1(a) You have been asked to advise the board whether the proposal should be adopted using

1(a) You have been asked to advise the board whether the proposal should be adopted using NPV and IRR analyses. The board has requested an appraisal of cash flows relating to investment, operations and exit (it is assumed that the product will cease production when the patent expires in year 10). In doing so, you need to present the following (using Excel):

(i) treatment of depreciation

(ii) treatment of working capital

(iii) calculation of initial cash outlay in year 0, operating cash flows per year and exit cash flows in year 10

(iv) calculation of NPV and IRR

(v) investment recommendation based on NPV and IRR analyses.

 

Nov 23 2019 Read more Less More

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