XYZ Ltd. is evaluating two investment projects. The company's cost of capital is 15% and...
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Accounting
- XYZ Ltd. is evaluating two investment projects. The company's cost of capital is 15% and the tax rate is 35%. Other information relating to both projects is as follows:
Particulars | Project X | Project Y |
Initial Investment | 2,500,000 | 3,000,000 |
Expected life | 4 years | 4 years |
Annual Cash Flow (before Tax) | 700,000 | 850,000 |
- Depreciation is charged on a straight-line basis. You are required to calculate: a. Payback period b. NPV c. Profitability index d. Discounted payback
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