Alpha Ltd is contemplating an investment in a new piece of machinery. Based on the details given below calculate the cash flows and perform the capital budgeting analysis. Would you go ahead with the investment? Initial Investment Cost: Rs.100, 000 Useful Life of Machinery: 5 years Annual Revenue: Rs. 40,000 Annual Operating Costs: Rs. 10,000 Annual Depreciation (Straight - line method): Rs. 20,000 Tax Rate: 30% Discount Rate: 10%
Alpha Ltd is contemplating an investment in a new piece of machinery. Based on the details given below calculate the cash flows and perform the capital budgeting analysis. Would you go ahead with the investment? Initial Investment Cost: Rs.100, 000 Useful Life of Machinery: 5 years Annual Revenue: Rs. 40,000 Annual Operating Costs: Rs. 10,000 Annual Depreciation (Straight - line method): Rs. 20,000 Tax Rate: 30% Discount Rate: 10%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Alpha Ltd is contemplating an investment in a new piece of machinery. Based on the details given below calculate the cash flows and perform the capital budgeting analysis. Would you go ahead with the investment? Initial Investment Cost: Rs.100, 000 Useful Life of Machinery: 5 years Annual Revenue: Rs. 40,000 Annual Operating Costs: Rs. 10,000 Annual
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