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Lambda Solutions Details: Initial investment of R750,000 and residual value of R50,000. Cashflows and discount factors: Year Cashflows Discount Factor Year 1 R100,000 0.909 Year
Lambda Solutions Details:
- Initial investment of R750,000 and residual value of R50,000.
- Cashflows and discount factors:
Year | Cashflows | Discount Factor |
Year 1 | R100,000 | 0.909 |
Year 2 | R160,000 | 0.826 |
Year 3 | R150,000 | 0.751 |
Year 4 | R110,000 | 0.683 |
Year 5 | R90,000 | 0.621 |
- Cost of capital: 11%
- Depreciation: R40,000 per year
- Tax rate: 26%
Required:
- Calculate each of the following: 1.1 Accounting Rate of Return 1.2 Payback period 1.3 Net Present Value (NPV) 1.4 Discounted Payback Period
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