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A new investment will cost 135.000. Additionally there will be 15000 installation costs. The investment will have 3 years life and zero residual value. The
A new investment will cost 135.000. Additionally there will be 15000 installation costs. The investment will have 3 years life and zero residual value. The company will use the fixed method of depreciation.
The new investment plan will save the company 70.000 before taxes in operational costs. For the evaluation of the investment the company uses 10% as cost of capital and the tax rate is 30%.
1. Calculate the cash flows.
2.calculate the npv of the plan
3.calculate the efficiency index [PI] of the plan
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