Jackson Corp is evaluating a project with the following financial projections:Initial investment of R1,800,000 with...
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Accounting
Jackson Corp is evaluating a project with the following financial projections:
- Initial investment of R1,800,000 with an expected residual value of R140,000.
Year | Cashflows | Discount factor |
Year 1 | R190,000 | 0.909 |
Year 2 | R210,000 | 0.826 |
Year 3 | R220,000 | 0.751 |
Year 4 | R170,000 | 0.683 |
Year 5 | R180,000 | 0.621 |
Cost of capital is 6%. Depreciation is R120,000 per year. Tax rate is 25%.
Required:
- Calculate each of the following:
- 1.10.1 Net Present Value (5)
- 1.10.2 Internal Rate of Return (5)
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