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Question: question 18 flight ltd intends to operate an internal passenger...

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QUESTION 18 Flight Ltd intends to operate an internal passenger airline business in Ghana. It intends to fly to all regional capitals in Ghana. Flight Ltd intends to buy four (4) light aircrafts at a cost of GHc1,000,000 per aircraft. The aircrafts will be used for five years the next five years is expected to be GHc200. The expected number of tickets to be sold and the associated costs for five years are provided below and sold for GHc200,000 per one. The average return ticket over Project Data YearAnnual Tickets 2018 2019 2020 2021 2022 500 4,000 11,000 10,000 7,000 Total cost GHc 660,000 700,000 800,000 830,000 940,000 The cost of capital for the firm is 10% per annum. All monies will be received and paid for in the years when revenue will be earned or expenditure will be incurred. Required Determine the net cash flow for the investment Determine the net present value for the proposed investment (6 marks) Is the proposed investment profitable and why? Determine the payback period. Explain two advantages of the net present value over the payback method of investment appraisal. (2 marks) a. (2 marks) b. c. (2 marks) d. (3 marks) e.

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