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STU Corporation is evaluating two exclusive projects. The company's cost of capital is 13% and the tax rate is 30%. Project details are as follows:
- STU Corporation is evaluating two exclusive projects. The company's cost of capital is 13% and the tax rate is 30%. Project details are as follows:
Particulars | Project X | Project Y |
Cost of project | 15,50,000 | 18,50,000 |
Expected life | 5 years | 5 years |
Annual Income (before Tax & Depreciation) | 4,75,000 | 5,50,000 |
- Depreciation is charged on a straight-line basis. You are required to calculate: a. Discounted payback period b. NPV c. Profitability index
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Calculus
Authors: Ron Larson, Bruce H. Edwards
10th Edition
1285057090, 978-1285057095
