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DEF Ltd is evaluating the purchase of two different pieces of equipment. The company's cost of capital is 9% and the tax rate is 29%.
- DEF Ltd is evaluating the purchase of two different pieces of equipment. The company's cost of capital is 9% and the tax rate is 29%. Project details are:
Particulars | Equipment A | Equipment B |
Cost of equipment | 20,00,000 | 24,00,000 |
Expected life | 6 years | 6 years |
Annual Income (before Tax & Depreciation) | 6,00,000 | 7,50,000 |
- Depreciation is charged on a straight-line basis. You are required to calculate: a. Discounted payback period b. NPV c. Profitability index
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Intermediate Algebra
Authors: Margaret Lial, John Hornsby, Terry McGinnis
13th Edition
0134895983, 978-0134895987
