Question NPV and IRR Tia Company Ltd is considering a new product line to augment its range line. It is anticipated that the new product line will involve cash investment of GHS 650,000 in year zero and GHS 850,000 in year one (1). The after-tax inflows of GHS 250,000 are expected in year two (2) and increases by 15% per year thereafter. The product lif span is 10 years and the cost of capital is 10 percent. Required Advice management of Tia Ltd b

You are required to calculate: (i) P/V Ratio (ii) B.E.P (iii) The sales required to earn a profit of GH/40,000 (iv) Profit when sales are GH250,000 (v) Margin of safety at a profit of GHc 50,000 You are required to calculate: (i) P/V Ratio (ii) B.E.P (iii) The sales required to earn a profit of GH/40,000 (iv) Profit when sales are GH250,000 (v) Margin of safety at a profit of GHc 50,000