The Directors of the ETAF Football Club ( a tax paying entity ) are very concerned about
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Question:
The Directors of the ETAF Football Club a tax paying entity are very concerned about the club's lack of
success over recent years. They are seriously considering the purchase of new football robots that are being
manufactured in TENG.
These robots will replace of the players the club fields each week. The robots cost $ each, with an
additional charge for painting in club colours and transporting them to the club's home ground. This amounts to
$ per robot. The robots will be depreciated on a straight line basis at twenty percent per annum.
The directors believe the robots, after being programmed to mark, handball and kick with both feet, can win most
of their games and so generate an additional $ in gate receipts each year. Not having to pay the current list
of players will save the club an extra $ a year. The robots will have a playing career of five years, after
which time their central processing units can no longer think or see. They will then be sold off for a total of
$ to a company that paints them white, puts whistles in their mouths, and uses them as umpires.
EHAF's required rate of return is percent and the corporate tax rate is
Calculate:
a Net Present Value NPV
b Internal Rate of Return IRR
Payback Period
Present Value Index
Related Book For
Modern Business Statistics With Microsoft Excel
ISBN: 9781337115186
6th Edition
Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
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