Beta Enterprises Details:Initial investment of R300,000 and residual value of R20,000.Cashflows and discount factors:YearCashflowsDiscount FactorYear...
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Accounting
Beta Enterprises Details:
Initial investment of R300,000 and residual value of R20,000.
Cashflows and discount factors:
Year
Cashflows
Discount Factor
Year 1
R50,000
0.909
Year 2
R90,000
0.826
Year 3
R100,000
0.751
Year 4
R70,000
0.683
Year 5
R60,000
0.621
Cost of capital: 11%
Depreciation: R20,000 per year
Tax rate: 25%
Required:
Calculate each of the following: 1.1 Accounting Rate of Return 1.2 Payback period 1.3 Profitability Index (PI) 1.4 Discounted Payback Period
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