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RST Corp is evaluating two mutually exclusive projects. The company's cost of capital is 9% and the tax rate is 28%. Project details are:
Particulars | Project Theta | Project Iota |
Cost of project | 15,00,000 | 18,00,000 |
Expected life | 4 years | 4 years |
Annual Income (before Tax & Depreciation) | 4,00,000 | 5,00,000 |
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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