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This company is planning to invest in a project called satyam. The management accounting department received the following information Capex Project period Revenue Supplies expense
This company is planning to invest in a project called satyam. The management accounting department received the following information Capex Project period Revenue Supplies expense Salary Utilities Discount Rate Sale of asset @ end of project Net working Capital $17000 5 years $8000 500 2500 500 8% $4000 $4500 The company's tax rate is 27%. The project also earned $1200 as interest revenue. The capital expenditure is depreciated using straight line method over the project and will have a residual value of $6000. the company will have to a rent for $700 during the project life. REQUIRED a) Calculate the initial investment b) Calculate each year cash flow c) Calculate the terminal value of the asset used d) Calculate the NPV e) Calculate the Profitability Index [PL]
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