TUV Corporation is considering two investment opportunities. The company's cost of capital is 15% and...
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Accounting
TUV Corporation is considering two investment opportunities. The company's cost of capital is 15% and the tax rate is 34%. Other information relating to both investments is as follows:
Particulars
Investment 1
Investment 2
Initial Investment
1,600,000
1,900,000
Expected life
5 years
5 years
Annual Cash Flow (before Tax & depreciation)
400,000
500,000
Depreciation is charged on a straight-line basis. You are required to calculate: a. Discounted payback period b. NPV c. Profitability index d. Payback period
Answer & Explanation
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