PQR Corporation is considering selecting a machine out of two options. The company's cost of...
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Accounting
- PQR Corporation is considering selecting a machine out of two options. The company's cost of capital is 8% and the tax rate is 30%. Other information related to both machines is as follows:
Particulars | Machine X | Machine Y |
Cost of machine | 1,000,000 | 1,300,000 |
Expected life | 10 years | 10 years |
Annual Income (before Tax & depreciation) | 150,000 | 200,000 |
- Depreciation is charged on a straight-line basis. You are required to calculate: a. Discounted payback b. NPV c. Profitability index d. Payback period
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