Question
The management of XYZ Corporation is evaluating two investment projects. The company's cost of capital is 10% and tax rate is 25%. Details of the
The management of XYZ Corporation is evaluating two investment projects. The company's cost of capital is 10% and tax rate is 25%. Details of the projects are:
Project A | Project B | |
Initial Investment | 12,00,000 | 20,00,000 |
Expected Life | 4 years | 5 years |
Annual Income before Depreciation & Tax | 4,00,000 | 6,00,000 |
Depreciation Method | Straight Line | Straight Line |
Calculate the following:
- Payback period.
- Net Present Value (NPV).
- Internal Rate of Return (IRR).
- Profitability Index.
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
