Q 5. DT Ltd. provides you the following information: 1. Purchase price of machine Rs. 1,90,000 2. Installation expenses Rs. 10,000 3. Useful life of machine 5 years 4. Salvage value at the end of useful life nil 5. Tax Rate 30% 6. Cost of capital 10% 7. Cash flows before depreciation and tax Rs. 1,00,000 p.a. Required: Calculate the Discounted Payback Period.
Q 5. DT Ltd. provides you the following information: 1. Purchase price of machine Rs. 1,90,000 2. Installation expenses Rs. 10,000 3. Useful life of machine 5 years 4. Salvage value at the end of useful life nil 5. Tax Rate 30% 6. Cost of capital 10% 7. Cash flows before depreciation and tax Rs. 1,00,000 p.a. Required: Calculate the Discounted Payback Period.
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
Related questions
Question
Full detailed solution
![Q 5.
DT Ltd. provides you the following information:
1.
Purchase price of machine
Rs. 1,90,000
2.
Installation expenses
Rs. 10,000
3.
Useful life of machine
5 years
4.
Salvage value at the end of useful life
nil
5.
Tax Rate
30%
6.
Cost of capital
10%
7.
Cash flows before depreciation and tax
Rs. 1,00,000 p.a.
Required: Calculate the Discounted Payback Period.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F611df1d7-534a-4d80-81f2-c14964b08b47%2F247ffa7b-c831-490a-bd07-e45d5879764c%2Fa2g192_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Q 5.
DT Ltd. provides you the following information:
1.
Purchase price of machine
Rs. 1,90,000
2.
Installation expenses
Rs. 10,000
3.
Useful life of machine
5 years
4.
Salvage value at the end of useful life
nil
5.
Tax Rate
30%
6.
Cost of capital
10%
7.
Cash flows before depreciation and tax
Rs. 1,00,000 p.a.
Required: Calculate the Discounted Payback Period.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
![Corporate Finance (The Mcgraw-hill/Irwin Series i…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education