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WXY Enterprises is planning to invest in one of two projects. The company's cost of...

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Question

Accounting

WXY Enterprises is planning to invest in one of two projects. The company's cost of capital is 11% and the tax rate is 25%. Project details are:

Particulars

Project Gamma

Project Delta

Cost of project

23,00,000

26,00,000

Expected life

6 years

6 years

Annual Income (before Tax & Depreciation)

8,00,000

9,25,000

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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