HRK Holdings Ltd. is considering a project requiring an investment of 100,000. Cash flows from...
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HRK Holdings Ltd. is considering a project requiring an investment of 100,000. Cash flows from the investment are 30,000 per annum for the first three years, 50,000 for year 4 and 10,000 for year 5. The company can raise funds at a cost of 8 percent per annum and depreciates the investment over a five-year period using the straight line basis. You are asked to present data to the board as instructed below so that a decision can be made as to whether the project can go ahead. You are aware that the company has made a return on capital employed of 10 percent for the last financial year
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