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ARR, Discounted cash flow help!!

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    • Thread Starter

    Hi there, I was looking for some much needed help!I have been working on a practice piece and have been struggling with the questions.

    Builders LTD are considering expanding into a new country. The costs would include:

    Machinery - £1,100,000
    Vans - £500,000
    Building Location - £900,000

    Year 1 - £500,000

    Year 2 - £600,000

    Year 3 - £700,000

    Year 4 - £750,000

    Year 5 - £750,000

    The accounting rate of return should be at least 15% and the cost of capital is 10%.The questions include working out the payback period and accounting rate of return method.Discounted cash flow (net present value and Internel rate of return)
    I would deeply appreciate any assistance.

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