Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. bmw ltd is considering investing in a new electric

BMW Ltd is considering investing in a new electric vehicle project with the following forecasted...

90.2K

Verified Solution

Question

Accounting

BMW Ltd is considering investing in a new electric vehicle project with the following forecasted details: Initial amount invested is R2,000,000 and expected residual value is R140,000.

Year

Cashflows

Discount factor

Year 1

R500,000

0.909

Year 2

R510,000

0.826

Year 3

R520,000

0.751

Year 4

R530,000

0.683

Year 5

R540,000

0.621

Assuming that the cost of capital for the company is 8%. The cash flows are after tax and depreciation is charged at R140,000 per year. Tax rate is 26%.

Required:

Calculate each of the following: 

1.1.1. Net Present Value (NPV) (10) 

1.1.2. Internal Rate of Return (IRR) (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!
Become a Member

Other questions asked by students

Q

In a survey of 1066 ​adults, a poll​ asked, \"Are you worried or not worried about...

Statistics
Q

How is Histidine used to modulate protein activity?

Chemistry
Q

Why is the liver unable to utilize acetyl-CoA for gluconeogenesis? Why is this not a limitation...

Biology
Q

When do we use I=P/a or I=P/4pi(r)^2? for example question 1: 30 seconds of exposure to 115...

Physics
Q

You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is...

Finance
Q

a Distinguish between complementation and recombination b Explain supplementation and its use in identifying steps...

Biology
Q

Assertion The electric flux of the electric field E dA is zero The electric field...

Physics
Q

Choose the sequence of steps below that verifies the identity O A csc t 1...

Basic Math
Q

AED 450,000 180,000 270,000 216,000 54,000 Sales (15,000 units) Less: Variable expenses Contribution margin Less:...

Accounting
Q

The following account information was taken from saber company latest income statement Revenue =632,000...

Accounting
Q

Required information Problem 10-71 (LO 10-4) (Algo) [The following information applies to the questions displayed...

Accounting
Q

Tax Return Problem 1040 Individual Tax Return 1040 Schedule A Itemized Deductions 1040 Schedule...

Accounting