Problem 2 A company is considering an investment proposal to install new milling...
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Accounting
Problem
A company is considering an investment proposal to install new milling controls at cost of The facility has a life expectancy of years and no salvage value. The tax rate is Assume the firm uses straight line depreciation and the same is allowed for tax purposes. The estimated cash flow before depreciation in tax CFBT from the investment proposal are as follows:
compute the following number
Payback.
Average rate of return
Internal rate of return
NPV @ discount rate and
Profitability index @ discount rate
Year CFBT
table
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