Question: Summit Ltd is considering an investment project that is expected to cost Sh 500,000 with a scrap value of Sh100, 000 after its 5 years

Summit Ltd is considering an investment project that is expected to

Summit Ltd is considering an investment project that is expected to cost Sh 500,000 with a scrap value of Sh100, 000 after its 5 years economic life. The project is expected to generate the following cash flows before depreciation and tax. (i)The applicable tax rate is 30% and depreciation is charged on a straight line. (ii) Assume a discount rate of 15% Calculate; Pay Back Period

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