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VWY Inc. is considering two mutually exclusive investments. The company's cost of capital is 12%...

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Question

Accounting

VWY Inc. is considering two mutually exclusive investments. The company's cost of capital is 12% and the tax rate is 25%. Details are given below:

Particulars

Investment G

Investment H

Cost of investment

18,00,000

20,00,000

Expected life

5 years

5 years

Annual Income (before Tax & Depreciation)

5,25,000

6,25,000

Depreciation is charged on a straight-line basis. You are required to calculate: a. Discounted payback period b. NPV c. Profitability index

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