Question
Given Information Penang, Malaysia Initial cash outlay $6,000,000 Useful life 20 Operating income 1,750,000 The cost of capital 9% Tax rate 40% Net cash flow
Given Information Penang, Malaysia
Initial cash outlay $6,000,000
Useful life 20
Operating income 1,750,000
The cost of capital 9%
Tax rate 40%
Net cash flow Net Income Cash Flow
Operating income $1,750,000 $1,750,000
Depreciation 300,000
Net Income before taxes 1,450,000
Tax, 40% 580,000 580,000
Net Income $870,000
Net cash flow $1,170,000
How would you find the average Book Value of Investment for each year?
Average net income and average book value of investment
Year Net Income Avg BV of Investment
1 $870,000
2 870,000
3 870,000
4 870,000
5 870,000
6 870,000
7 870,000
8 870,000
9 870,000
10 870,000
11 870,000
12 870,000
13 870,000
14 870,000
15 870,000
16 870,000
17 870,000
18 870,000
19 870,000
20 870,000
What is the average rate of return of investment?
What is the payback period?
What is the net present value?
What is the internal rate of return?
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Intermediate Accounting IFRS
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
4th Edition
1119607515, 978-1119607519
