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can you please answer q2, using the needed information for q1, please show all steps, thank you 1. A company has a project generating cash
can you please answer q2, using the needed information for q1, please show all steps, thank you
1. A company has a project generating cash inflows of 140,000 GBP per year and cash outflows of 100,000 GBP per year. The investment outlay on the project is 100,000 GBP and its life is 10 years. The tax rate is Te = 40%. and the opportunity cost of capital is 12%. (1) Present two alternative formulations for the net cash flow adjusted for the depreciation tax shelter. (2) With straight-line depreciation calculate the net present value of the project. 2. Assume the same facts as in the previous problem, except that the an- nual cash inflow is 22.000 GBP. (1) Calculate the net present value using straight-line depreciation. (2) Calculate the net present value using the sum-of-the-years digits method of accelerated depreciationStep by Step Solution
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