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Question 1 A firm whose cost of capital is 10% is considering two mutually exclusive projects X and. 1 answer below » Question 1 A firm whose cost of capital is 10% is considering two mutually exclusive projects X and Y, the details of which are: Year Project X Project Y Cost 0 Rs. 70,000 Rs. 70,000 Cash Inflows 1 Rs. 10,000 Rs. 50,000 2 Rs. 20,000 Rs. 40,000 3 Rs. 30,000 Rs. 20,000 4 Rs. 45,000 Rs. 10,000 5 Rs. 60,000 Rs. 10,000 Compute the Net Present Value at 10%, Profitability Index, and Internal Rate of Return of the two projects. Document Preview: Nick Ltd View complete question » Question 1 A firm whose cost of capital is 10% is considering two mutually exclusive projects X and Y, the details of which are: Year Project X Project Y Cost 0 Rs. 70,000 Rs. 70,000 Cash Inflows 1 Rs. 10,000 Rs. 50,000 2 Rs. 20,000 Rs. 40,000 3 Rs. 30,000 Rs. 20,000 4 Rs. 45,000 Rs. 10,000 5 Rs. 60,000 Rs. 10,000 Compute the Net Present Value at 10%, Profitability Index, and Internal Rate of Return of the two projects. Document Preview: Nick Ltd acquired 100% of the issued capital of Wing Ltd on 1 July 2011 for $270000. The statements of financial position of the companies immediately after the acquisition are provided below. All assets have been reported following fair value.
Statement of Financial Position
For the year ended 1 July 2011
Nick Ltd Wing Ltd
$ $
Shareholders’ equity
Share capital 450,000 180,000
General reserve 45,000 25,000
Retained earnings 140,000 20,000
Total shareholders’ equity 635,000 225,000
Assets
Current assets
Cash at Bank 50,000 30,000
Accounts Receivable 20,000 10,000
Inventory 100,000 25,000
170,000 65,000
Non-current assets
Investment in Wing Ltd 270,000 —-
Land 250,000 200,000
Plant & Equipment 100,000 80,000
620,000 280,000
Total assets 790,000 345,000
Liabilities
Current liabilities
Accounts Payable 40,000 10,000
Interest Payable 15,000 8,000
55,000 18,000
Non-current liabilities
Bank loan 100,000 102,000
Total liabilities 155,000 120,000
Net assets 635,000 225,000
Required
1. Calculate Goodwill (show workings)
2. Prepare consolidation journal entry at the date of acquisition.
3. Prepare consolidation worksheet.
4. Prepare the consolidated statement of financial position as at 1 July 2011 (immediately after the acquisition). Attachments: Question.docx View less » Dec 27 2015 12:54 AM
