A) Calculate Net Present Value and Profitability Index using straight-line depreciation; B) Net Present Value and Profitability
Fantastic news! We've Found the answer you've been seeking!
Question:
A) Calculate Net Present Value and Profitability Index using straight-line depreciation;
B) Net Present Value and Profitability Index using double declining depreciation.
Investment cost is 400,000
Gross cash inflows for 5 years are: Year 1: 80,000 Year 2: 170,000 Year 3: 115,000 Year 4:
95,000 Year 5: 90,000
The cost of money is 12%
The salvage value of the investment is 40,000 and is not included in the above cash inflows
Estimated Tax rate for all years is 25%
Using straight-line depreciation
Cash inflows occur at end of each year.
Related Book For
Posted Date: