Determine when to abandon the project assuming a discount


Project A has the following cash flows over its useful life of 3 years. The market value (Abandonment value) has also been given.

Year Cash Abandonment

flow value

Sh'000' Sh'000'

0 (4,800) 4,800

1 2,000 3,000

2 1,875 1,900

3 1,750 0

Required:

Determine when to abandon the project assuming a discount rate of 10%.

Solution Preview :

Prepared by a verified Expert
Finance Basics: Determine when to abandon the project assuming a discount
Reference No:- TGS01492326

Now Priced at $10 (50% Discount)

Recommended (94%)

Rated (4.6/5)