Chapter 4 Capital Budgeting and Basic Investment Appraisal ...

(ix) A loan for £1 million will be taken out to assist in financing the project. The loan will be repayable in two year’s time, with interest of 8% per annum being payable for its duration. (x) The company’s cost of capital is 10% per annum. (xi) Assume that all cash flows occur at the end of each year, unless otherwise stated. Required: ................
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