7/5/2021 @ Capital Budgeting - II Sujeewa Damayanth (PRO) At the end of the session, you should be able to; + Understand mutually exclush ancthee prjects game time Cant undertake paject. # To recover the orginal + Where projects are mutually exclusive, itis possible for the.NPV-and the IRR ‘methods to suggest different rankings as to which project shouldbe given priority, Mutually exclusive projects exst where the acceptance of one project ‘excludes the acceptance of anather project. hove select one ( Prsecr are matually €xclusive takes [Mutually Exclusive Projects Payback Method be 000 3: initial investment Cash inflow 30.000 - syears ash outlay shat i's tHe period it Ts Issue Is we de not contder 4 Hime value oF money. Pap back pered < bo 608 ‘s000 = S-years.Ue a 7spa02 oa oan K geemen 3-5 ark a ao litative Factors AR 3000 bond basa coupon rte of anc wil repays nominal woe iuhat type ‘tent mares our yer tne, Th bond wil be purchased today fox + Mot aivestment projects cn be descr — Te Soo ex reerest and hed el matty Calcdate, to the nearest OT ‘qualiteipe Goins | sontuyeons mabees eg: teristics rte {hc yd ts mata for the bond based on todays purchase pce. gar sheold ae + Nevertheless, the procecres descbed i thi + Ao unc bond has 3 coupon rt of pes ansn ad wil olen muting fedig ce aaiby commer tres eeanees ere (a ty elke aes, aapitel wees fe shal comider qualtatre eager peep ete ey fehe. ‘ractet value ofthe bond dacs? + Nek all lerertrent preject can be nearly setected mehary terms. Gosder in. eee we should Te quoltatire |