An investment of P 800,000 can bring in the following annual cash inflows and salvage values:...

 

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An investment of P 800,000 can bring in the following annual cash inflows and salvage values: The company uses the straight line method for depreciation and tax rate is 40% Net Cash Inflows Salvage Values (end of each year) Year 1 P 258,000 368,000 2 244,000 160,000 3 236,000 64,000 4 156,000 32,000 5 120,000 16,000 6 112,000 8,000 Required: Determine the following. Round present value factors to 4 decimal places. And round peso values to whole numbers. 1. Payback period 2. payback bailout period. 3. Accounting rate of return 4. Net present value assuming the discount rate is 12% 5. Internal rate of return 6. Profitability index An investment of P 800,000 can bring in the following annual cash inflows and salvage values: The company uses the straight line method for depreciation and tax rate is 40% Net Cash Inflows Salvage Values (end of each year) Year 1 P 258,000 368,000 2 244,000 160,000 3 236,000 64,000 4 156,000 32,000 5 120,000 16,000 6 112,000 8,000 Required: Determine the following. Round present value factors to 4 decimal places. And round peso values to whole numbers. 1. Payback period 2. payback bailout period. 3. Accounting rate of return 4. Net present value assuming the discount rate is 12% 5. Internal rate of return 6. Profitability index

Answer rating: 100% (QA)

1 Payback Period Cumulative Cash Inflows Year 1 P258000 Year 2 P258000 P244000 P502000 Year 3 P50200... View the full answer