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please solve the problem The ABC company was established on 2010. The company started with the following initial expenditures: Description Cost of capital equipment Costs
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The ABC company was established on 2010. The company started with the following initial expenditures: Description Cost of capital equipment Costs ($) SN 900,000 4,000,000 6,000,000 700,000 2,000,000 Costs of vehicles Cost of land 3 Cost of furniture 4 Cost of hardware and software Tax is paid on one year accrual basis. Discounting rate of the project is chosen as 9% which represents the interest from the bank deposit as an opportunity cost. 30% tax on the net cash inflow is levied from the second year. The project is evaluated using cash inflow and cash outflows. The following table shows the information related to cash inflows, operating costs, and production costs assuming no other costs applicable. Operating costs Production costs Cash flow Year 85,000 145,000 255,800 680,500 540,800 580,900 Task: Evaluate the project using the following methods of evaluation: 2,250,000 4,650,500 6,545,000 9,250,000 8,358,200 9,520,200 345,000 458,200 650,500 954,000 780,500 880,500 3 4 5 1. Payback period (PBP) 2. The net present value (NPV) 3. Cost benefits analysis (CBA). 4. Write your conclusionStep by Step Solution
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