JKL Corporation is considering two capital investment options. The company's cost of capital is 14%...
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Accounting
- JKL Corporation is considering two capital investment options. The company's cost of capital is 14% and the tax rate is 27%. Other information relating to both options is as follows:
Particulars | Option A | Option B |
Cost of Investment | 1,100,000 | 1,300,000 |
Life Span | 8 years | 8 years |
Annual Earnings (before Tax & depreciation) | 300,000 | 400,000 |
- Depreciation is charged on a straight-line basis. You are required to calculate: a. NPV b. Profitability index c. IRR d. Discounted payback
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