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%
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...
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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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