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Wine - alot Pvt Ltd is thinking of introducing a new line of drinking glasses, for which it has decided to purchase new machinery. Ruby
Winealot Pvt Ltd is thinking of introducing a new line of drinking glasses, for which it has decided to
purchase new machinery. Ruby Manufacturers are offering their machinery at Rs lakhs. The
machinery is said to have a life cycle of years. Winealot has already pitched their product to
several prominent restaurants, hotel chains, and home ware stores and the response has been very
positive. They estimate an annual return of Rs lakhs per year for the first years, and lakhs
per annum for the next and Rs lakhs every year for the remaining years. The estimated
operating costs of the machine are Rs lakhs per annum. The WACC of Winealot Pvt Ltd is pa
and corporate tax rate is Calculate
a marks
b IRR marks
c MIRR marks
Evaluate the parameters calculated by you to decide if it makes sense to go ahead with the
introduction of the new glassware line? Whatever your answer may be give reasons for the
same. marks
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