Arihant Infra Ltd. is considering a project costing Rs. 80,000. The net income before depreciation...
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Accounting
Arihant Infra Ltd. is considering a project costing Rs. 80,000. The net income before depreciation and taxes is estimated as follows :
Year 2018-19 2019-20 2020-21 2021-22 2022-23
Net Income 20,000 24,000 28,000 32,000 40,000
(in Rs.)
Depreciation is charged at 20% per annum by Reducing Balance Method. Corporate Tax rate is 40%.
Calculate the ARR on average investments and the Payback Period of the project.
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