Question: Present Value, Future Value and Mortgage tables are separately attached with exam paper. Question 2 A manufacturing company is looking for an investment proposal to

 Present Value, Future Value and Mortgage tables are separately attached with

Present Value, Future Value and Mortgage tables are separately attached with exam paper. Question 2 A manufacturing company is looking for an investment proposal to setup a new plant to produce its coming year orders. The relevant data for the installation of two plants are as follows: The company follows the straight-line method of depreciation and the estimated salvage value for both types of plant is zero. The corporate tax rate is 40% and the interest rate is 10%. Calculate and analyze your analysis for the most profitable investment based on the following methods: (a) Net Present Value. (20 marks) (b) Profitability Index. (5 marks) (c) Payback period. (20 marks) [Total: 45 Marks]

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