RST Corp is evaluating two mutually exclusive projects. The company's cost of capital is 9%...

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Accounting

RST Corp is evaluating two mutually exclusive projects. The company's cost of capital is 9% and the tax rate is 28%. Project details are:

Particulars

Project Theta

Project Iota

Cost of project

15,00,000

18,00,000

Expected life

4 years

4 years

Annual Income (before Tax & Depreciation)

4,00,000

5,00,000

Depreciation is charged on a straight-line basis. You are required to calculate: a. Internal Rate of Return (IRR) b. NPV c. Payback period

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