A company is considering a new project for which the investment data are as follows: Cash...

 

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A company is considering a new project for which the investment data are as follows: Cash Outlay Depreciation Corporate Tax Rate Year Profit before depreciation and after tax (PBDAT) Rs 2,00,000 20% 25% Year 1,00,000 2 2 1,00,000 80,000 80,000 3 On the basis of the available data, set out calculations illustrating and comparing by the following methods: i. Pay back method ii. Average Rate of return&Net present value @ 10%. 3 DF@ 10% 0.909 0.826 0.751 0.683 5 5 0.621 40,000 A company is considering a new project for which the investment data are as follows: Cash Outlay Depreciation Corporate Tax Rate Year Profit before depreciation and after tax (PBDAT) Rs 2,00,000 20% 25% Year 1,00,000 2 2 1,00,000 80,000 80,000 3 On the basis of the available data, set out calculations illustrating and comparing by the following methods: i. Pay back method ii. Average Rate of return&Net present value @ 10%. 3 DF@ 10% 0.909 0.826 0.751 0.683 5 5 0.621 40,000