estimated cash flows before tax (CFBT) are? 10,000; 11,000; R14,000; 15,000 and new machinery. The project will cost 50,000 with life of 5 years and no salvage value. Question. 3. A company is considering an investment proposal to install a Belax rate of the company is 55% and it uses straight line method of depreciation. The 25,000 during years 1,2,3,4 and 5 respectively. Compute: (i) Average rate of return. (ii) NPV at 10% discount rate. (iii) Profitability Index at 10% discount rate. Note : Discount factors at 10% are 0.909, 0.826, 0.751, 0.683 and 0.621 for the years 1,2,3,4 and 5.
estimated cash flows before tax (CFBT) are? 10,000; 11,000; R14,000; 15,000 and new machinery. The project will cost 50,000 with life of 5 years and no salvage value. Question. 3. A company is considering an investment proposal to install a Belax rate of the company is 55% and it uses straight line method of depreciation. The 25,000 during years 1,2,3,4 and 5 respectively. Compute: (i) Average rate of return. (ii) NPV at 10% discount rate. (iii) Profitability Index at 10% discount rate. Note : Discount factors at 10% are 0.909, 0.826, 0.751, 0.683 and 0.621 for the years 1,2,3,4 and 5.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:estimated cash flows before tax (CFBT) are? 10,000; 11,000; R14,000; 15,000 and
The tax rate of the company is 55% and it uses straight line method of depreciation. The
v machinery. The project will cost 50,000 with life of 5 years and no salvage value.
Question. 3. A company is considering an investment proposal to install a
new
25,000 during years 1,2,3,4 and 5 respectively. Compute :
(i) Average rate of return.
(ii) NPV at 10% discount rate.
(iii) Profitability Index at 10% discount rate.
Note : Discount factors at 10% are 0.909, 0.826, 0.751, 0.683 and 0.621 for the
years 1,2,3,4 and 5.
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