INTERIM FINANCE Exercise 1 The net flows of an investment are 120,000 dollars. The cost of life of the machine was 600,0
Posted: Wed Mar 09, 2022 8:43 am
INTERIM FINANCE
Exercise 1
The net flows of an investment are 120,000 dollars. The
cost of life of the machine was 600,000 dollars. It had a
duration of 6 years life and the company follows
straight line method DEP'n. The Investment
it has scrap value 2000 dollars. The Working capital was
$12,000, where 2nd, 3rd and were rising
year by 2% and the 5th and 6th year by 3%. The wacc was 6%
and
the tax rate of 25%.
A) calculate the total cash flow in each
year for investment.
B) calculate the Narr of the investment and talk
whether it is advantageous for the company.
C) indicate the pros and cons
of NPV.
Exercise 1
The net flows of an investment are 120,000 dollars. The
cost of life of the machine was 600,000 dollars. It had a
duration of 6 years life and the company follows
straight line method DEP'n. The Investment
it has scrap value 2000 dollars. The Working capital was
$12,000, where 2nd, 3rd and were rising
year by 2% and the 5th and 6th year by 3%. The wacc was 6%
and
the tax rate of 25%.
A) calculate the total cash flow in each
year for investment.
B) calculate the Narr of the investment and talk
whether it is advantageous for the company.
C) indicate the pros and cons
of NPV.