Question
Calculate: a) Pay-back period b) Average rate of return c) BBA331_Page 3 of 4 Q.N Case Study co RBT IS a. A company is considering
Calculate: a) Pay-back period b) Average rate of return c) BBA331_Page 3 of 4
Q.N Case Study co RBT IS a. A company is considering an investment proposal to C05 purchase a machine costing machine has a life expectancy of five years and no salvage value. Ihe company's tax rate is 40%. The firm uses sta.ight line method for providing depreciation- The estimated cash flows before tax after depreciation (CFBT) from the machine are as follows: Year 2 3 4 5 Calculate: a Pa -back 70000 100000 150000 criod b Avera e rate of return c BBA331_Pagc 3 of4 fact" Net Present Value and d) profitability Index at 10% discount rate. You may use thc following table of prcscnt valuc (P V): 0.909 0.826 onsl 0.683 Revised Bloom's Taxonomy RB' Levels : L) Rememberin LA Anal in L2 Understandin LS Evaluatin L6 - Creatin
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