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QRS Corporation is planning to purchase one of two machines. The company's cost of capital is 15% and the tax rate is 29%. Below are the details:
Particulars | Machine Y | Machine Z |
Cost of machine | 19,00,000 | 21,50,000 |
Expected life | 4 years | 4 years |
Annual Income (before Tax & Depreciation) | 5,50,000 | 6,75,000 |
Depreciation is charged on a straight-line basis. You are required to calculate: a. Internal Rate of Return (IRR) b. NPV c. Payback period
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