Apple Inc is considering investing in a new retail store project with the following forecasted...
90.2K
Verified Solution
Link Copied!
Question
Accounting
Apple Inc is considering investing in a new retail store project with the following forecasted details: Initial amount invested is R900,000 and expected residual value is R80,000.
Year
Cashflows
Discount factor
Year 1
R250,000
0.909
Year 2
R260,000
0.826
Year 3
R270,000
0.751
Year 4
R280,000
0.683
Year 5
R290,000
0.621
Assuming that the cost of capital for the company is 10%. The cash flows are after tax and depreciation is charged at R90,000 per year. Tax rate is 28%.
Required:
Calculate each of the following: 1.1.1. Accounting Rate of Return (5) 1.1.2. Net Present Value (NPV) (10)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
