Levels Tought:
Elementary,Middle School,High School,College,University,PHD
Teaching Since: | May 2017 |
Last Sign in: | 307 Weeks Ago, 2 Days Ago |
Questions Answered: | 66690 |
Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
XYZ Ltd. has decided to diversity its production and wants to invest its surplus funds on the mostprofitable project. It has under consideration only two projects – “A” and “B”. The cost of project “A” isRs. 100 lacs and that of “B” is Rs. 10 lacs. Both projects are expected to have a life of 8 years only and atthe end of this period “A” will have a salvage value of Rs. 4 lacs and “B” Rs. 14 lacs. The runningexpenses of “A” will be Rs. 35 lacs per year and that of “B” Rs. 20 lacs per year. In either case thecompany expects a rate of return of 10%. The company’s tax rate is 50%. Depreciation is charged onstraight line basis. Which project should be company take up?
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