Question
please show all working out and without using ecxel Quasar Tech Ltd. is investing $6 million in new machinery that will produce the next-generation routers.
please show all working out and without using ecxel
Quasar Tech Ltd. is investing $6 million in new machinery that will produce the next-generation routers. Sales to its customers will amount to $1 750 000 for the next 3 years and then increase to $2.4 million for 3 more years. The project is expected to last 6 years and cost the company annually $898 620 (excluding depreciation). The machinery will be depreciated to zero by year 6 using the straight-line method. The companys tax rate is 30 per cent, and its cost of capital is 16 per cent.
a. What is the payback period?
b. What is the average accounting return (ARR)?
c. Calculate the project NPV.
d. What is the IRR for the project?
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