TUV Corporation is considering two investment opportunities. The company's cost of capital is 15% and...
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Accounting
- TUV Corporation is considering two investment opportunities. The company's cost of capital is 15% and the tax rate is 34%. Other information relating to both investments is as follows:
Particulars | Investment 1 | Investment 2 |
Initial Investment | 1,600,000 | 1,900,000 |
Expected life | 5 years | 5 years |
Annual Cash Flow (before Tax & depreciation) | 400,000 | 500,000 |
- Depreciation is charged on a straight-line basis. You are required to calculate: a. Discounted payback period b. NPV c. Profitability index d. Payback period
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