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DEF Company is analyzing two exclusive projects. The company's cost of capital is 13% and...

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Accounting

  • DEF Company is analyzing two exclusive projects. The company's cost of capital is 13% and the tax rate is 30%. Other information regarding both projects is as follows:

Particulars

Project Alpha

Project Beta

Initial Cost

1,800,000

2,400,000

Project Duration

3 years

3 years

Annual Income (before Tax)

500,000

650,000

  • Depreciation is charged on a straight-line basis. You are required to calculate: a. Payback period b. NPV c. Profitability index d. IRR

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