A limited company is considering investing a project requiring a capital outlay of ` 2,00,000. Forecast for
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A limited company is considering investing a project requiring a capital outlay of ` 2,00,000. Forecast for annual income after depreciation but before tax is as follows: Depreciation may be taken as 20% on original cost and taxation at 50% of net income. You are required to evaluate the project according to each of the following methods:
(a) Pay-back method
(b) Rate of return on original investment method
(c) Rate of return on average investment method
(d) Discounted cash flow method taking cost of capital as 10% (e) Net present value index method
(f) Internal rate of return method
Related Book For
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
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