A company has an investment opportunity costing $40,000 with the following expected net cash flow after taxes
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Question:
- A company has an investment opportunity costing $40,000 with the following expected net cash flow after taxes and before depreciation.
Year Net Cash flow
1 $7,000
2 7,000
3 7,000
4 7,000
5 7,000
6 8,000
7 10,000
8 15,000
9 10,000
10 4,000
Using 10% as the cost of capital, determine the following.
- Payback period
- Net present value at 10% discount factor
- Profitability index at 10% discount factor
- Internal rate of return with the help of 10% and 15% discount factor.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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