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40000 Page 6 of 8 2. Answer both the questions (a) and (b) a) Power Company is considering building which will require the purchase of
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Page 6 of 8 2. Answer both the questions (a) and (b) a) Power Company is considering building which will require the purchase of a building for OMR 400,000 at time zero. The scrap value at the end of its useful life is RO 40,000. Corporation tax, at a rate of 10% of taxable income, is payable. Cash flows before depreciation are forecast to be: Time (year) 2 3 Cash flows 400,000 300,000 250,000 However, these are expected to rise by 5.0% pa because of inflation The firm's cost of capital is 12%. Evaluate and find the discounted Payback period by. Discounting money cash flows. (PV/246 71.8929, 92.7972, 73.7118 1 Englise B CD here to searchStep by Step Solution
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