ABC Ghana Ltd is considering investing in the following projects which are considered mutually exclusive Project1 Project2 Annual cash inflows 1,000,000 2,000,000 Cost of Machine 2,500,000 6,000,000 Scrap value of Machine 250,000 1,000,000 Expected Time 5 years ABC Ghana Ltd uses the straight-line method of depreciation. However, tax-allowable depreciation is 30% on straight line basis. The cost of capital for the company is 20% per annum. Calculate the Accounting Rate of Return for each project, Calculate the Net Present Value (NPV) for each project. And lastly Compute the Payback period for each project?
ABC Ghana Ltd is considering investing in the following projects which are considered mutually exclusive
Project1 Project2
Annual
Cost of Machine 2,500,000 6,000,000
Scrap value of Machine 250,000 1,000,000
Expected Time 5 years
ABC Ghana Ltd uses the straight-line method of
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