Question
Question 1: You are the financial manager of an organisation and are planning to invest $20,000 on a new piece of machinery. This machinery will
Question 1: You are the financial manager of an organisation and are planning to invest $20,000 on a new piece of machinery. This machinery will have a useful economic life of 5 years and the cash flows associated with it are expected to be $4,300 annually. The discount rate is 2%.
Required
a.Calculate the IRR of the project
b.If there is a 18% WDA for the above investment and the corporate Tax Rate is 20%, calculate the NPV of the project at the end of the 5th year.
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Derivatives Markets
Authors: Robert L. McDonald
2nd Edition
032128030X, 978-0321280305
