Question: Old MathJax webview Old MathJax webview Old MathJax webview introduction to business finance 11 sorry.last 2 digit is 20 Q3 Thoma Pharma may buy equipment

Old MathJax webview

Old MathJax webview
Old MathJax webview

Old MathJax webview Old MathJax webview Old MathJax webview introduction to business

introduction to business finance

11

sorry.last 2 digit is 20

Q3 Thoma Pharma may buy equipment costing $60,000. This equipment is expected to reduce costs of staff by $20,000 in first year & in coming years savings are expected to increase by sum of last two digits of your roll number percent till fifth year. The equipment is depreciated using straight line method. No salvage value is expected at the end. The corporate tax rate for Thoma is 38 percent and its required rate of return is 15 percent. (If profits after taxes on the project are negative in any year, the firm will offset the loss against other income for that year.), what is the NPV of project? (Marks 07)

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