Question
A company is considering an investment proposal to install new milling machine. The project will cost Rs.50,000. The facility has a life expectancy of 5
A company is considering an investment proposal to install new milling machine. The project will cost Rs.50,000. The facility has a life expectancy of 5 years and no salvage value. The company tax rate is 40%. Firm uses straight-line method for depreciation. The estimated earnings before tax from the proposed investment plan are as under. Year Earning before tax 1 Rs. 22,000 2 18,000 3 14,000 4 15,000 5 25,000 Compute cash flow for 5 years. Calculate:
Payback period
Profitability Index
IRR
NPV( discount rate is 15%)
Discounted Payback
MIRR
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