JKL Ltd is planning to undertake a project requiring an investment of $200,000. The project...
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Accounting
JKL Ltd is planning to undertake a project requiring an investment of $200,000. The project is expected to generate profits before depreciation and tax of:
Year
Profit (Rs.)
1
60,000
2
70,000
3
80,000
4
90,000
5
50,000
Depreciation is to be provided at 20% per annum on the straight-line basis, and the tax rate is 25%. Required:
Compute the Payback Period and ARR
Determine NPV and PI, assuming the cost of capital is 11%
Calculate the IRR
Perform a break-even analysis for the project
Answer & Explanation
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