Question
XYZ Company is evaluating two exclusive projects. The company's cost of capital is 14% and the tax rate is 27%. The details are as follows:
XYZ Company is evaluating two exclusive projects. The company's cost of capital is 14% and the tax rate is 27%. The details are as follows:
Particulars | Project Kappa | Project Lambda |
Cost of project | 12,00,000 | 15,00,000 |
Expected life | 6 years | 6 years |
Annual Income (before Tax & Depreciation) | 3,75,000 | 4,75,000 |
Depreciation is charged on a straight-line basis. You are required to calculate: a. Internal Rate of Return (IRR) b. NPV c. Payback period
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Corporate Finance A Practical Approach
Authors: Michelle R Clayman, Martin S Fridson, George H Troughton, Matthew Scanlan
2nd Edition
1118217292, 9781118217290
