ROYAL

COLLEGE ADAMA CAMPUS

DEPARTMENT OF ACCOUNTING & FINANCE

Worksheet II: Project Analysis and Evaluation

For first year Accounting and Finance students
Final Submission Date:

Submitted To: Ins Tewodros B.

Aug 08 2020
Name:______________________________ _________________ Student ID:___________
GENERAL DIRECTION:
 Attempt all questions & Put your answer on provided answer sheet only.
 Don’t use a red pen and/or a pencil for your answer.
 Manage your time properly and submit your answer sheet before the final date
Worksheet II: Project Analysis and Evaluation
1. Describe the objective of financial analysis
2. Describe Capital budgeting and the most common capital budgeting techniques.(present each
techniques in detail)
I. Calculate the payback period of the following project using Non-discounting
(traditional) criteria
1. Assume that a project requires an initial investment of Br. 36,000 and annual after tax cash flows of Br.
12,000 for five years. How long it takes the company to recover its initial investment? (Note: the cash
flows are not in annuity form)
2. Assume that a project requires an initial investment of Br. 120,000. The after taxes cash flows (or net
cash flows) are as follows: (Note: the cash flows are not in annuity form)

Year 1 Year 2 Year 3 Year 4 Year 5

46,000 23,000 35,000 29 15