Question: QRS Enterprises is considering two mutually exclusive projects. The company's cost of capital is 10% and the tax rate is 28%. Other information regarding both

  • QRS Enterprises is considering two mutually exclusive projects. The company's cost of capital is 10% and the tax rate is 28%. Other information regarding both projects is as follows:

Particulars

Project A

Project B

Cost of Project

2,200,000

2,700,000

Project Duration

6 years

6 years

Annual Revenue (before Tax & depreciation)

600,000

750,000

  • Depreciation is charged on a straight-line basis. You are required to calculate: a. NPV b. Payback period c. Profitability index d. IRR

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