(a(i))[12]
Calculate the net present value (NPV) for the building investment, using Alan’s estimate of the sale proceeds.
(a(ii))[3]
Calculate the net present value (NPV) for the building investment, using Bob’s estimate of the sale proceeds.
(b)[3]
Calculate the sales proceeds at the end of year 4 that would make the net present value (NPV) equal to zero.
(c)[5]
Advise Jason whether he ought to proceed with investing in the building or not. Justify your answer.
(d)[2]
State two reasons why calculating the payback period is a less useful investment appraisal method than calculating net present value (NPV).