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
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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.
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