(a)[8]
Calculate the net cash flow in each year, and overall, for Product X.
(b)[7]
Calculate Product X’s net present value.
(c)[2]
Advise Alexander which product he ought to make if he is relying only on net present value. Justify your answer.
(d)[2]
State one benefit and one drawback of using net present value for investment appraisal.
(e)[3]
Explain why Alexander might or might not decide to use the payback method of investment appraisal.
(f)[3]
State three non-financial factors that Alexander should take into account when deciding between Product X and Product Y.