( 2010- Accounting / Finance/ Management ) Part- ( C) Q. No-13.

M.D. SELIK. REZ

2010-2019                        ( B,B,A & M,B,A ) Hon’s

M.N.: 01785911142 or 01750279313

 

(2010) Part-(B) = ( Q. D. Ni )

 

(2010-Accounting /Finance/Management ) Part- ( C) Q. No-13. 13.

 

(2010-Accounting /Finance/Management ) Part- ( C) Q. No-13. 13.

A company is considering an investment proposal that requires an initial cash outlay of Tk 50,000. The investment will have a life of 5 years. The project will have salvage value at the end of its life. The company uses the straight-line method of depreciation. The company’s tax rate is 40%. The estimated cash flows befor taddx are as follows :

Year Cash flows
1 Tk 12,000
2 Tk 14,000
3 Tk 16,000
4 Tk 18,000
5 Tk 20,000

The PV factors are : 0.9091,  0.8264,  0.7513 ,  0.6830  and 0.6209

Required :-

  • Pay back Period (PBP)
  • Nett Present Value (NPV)
  • Profitability Index (PI)
  • Nett Profitability Index (NPI)
  • Surplus Life (S.L)

 

(2011) Patr-(B) = (Q.No- 07.)

A project initial cost is Tk 40,000. Its expected life is 5 years, and the discount rate is 10%. Cash inflows are given below: –

Year Amount (Tk)
1 12,000
2 15,000
3 13,000
4 10,000
5 14,000

Required: Determine discounted Payback Period.

 

 

 

 

 

 

 

 

 

( 2011 Accounting /Finance/Management) Patr-(C) Q. No-12. 12.

From the information of Jony company :

Calculate . (a) Pay Back Perion (PBP).

(b) Nett Present Value (NPV).

(c) Internal Rate of Return (IRR).

  Taka
Purchase price of a machine 2,00,000
Import duty 30,000
Carrying cost 7,000
Installation charge 13,000
Working capital 50,000
Usefull life 5 year

Annual cash inflows :

Year Amount (Tk)
1 80,000
2 70,000
3 90,000
4 95,000
5 85,000

The company pays tax @ 30% and charges depreciation on straight-line basis. Discount rate is 10%.

 

 (2012) Part-(B) = ( Q.D. Ni )

(2010-Accounting /Finance/Management ) Part- ( C) Q. No-13. 13.

(2012 Accounting/Finance/Management) Part-(C) Q. No-16.

Jamun A Ltd. is considering investing in a project that requires Tk 2,00,000 cash outlay. Depreciation on a straight-line basis towards zero salvage.Corporate tax rate: 25% and cost of capital: 12% and cost of capital: 12%. Estimated gross cash flows (CFAT) are as follows:

Year 1 2 3 4 5
Gross cash-flows (Tk) 80,000 1,00,000 1,40,000 90,000 60,000

Calculate : (1) Discounted Payback Period. (2) Nett Present Value. (3) Profitability Index.

(4) Internal Rate of Return.

(2013) Part-(B)= ( Q. No. 09. )

Canvas Ltd. is considering two mutually exclusive investments. Project- A and Project- B Project- B required an initial outlay of Tk 20,000 and hasexpected cash inflows of Tk 5,000 for each of the next 5 year. Project-B requires an initial outlay of Tk 25,000 and has an expected cash inflows of Tk 6,500 for cash of the following 5 year. Use payback period measure to determine which project the company should choose.

 

(2010-Accounting /Finance/Management ) Part- ( C) Q. No-13. 13.

(2013 Accounting / Finance/ Management) Part- (C) = Q. No. 11.

Thomas company is considering two mutually projects. The firm. Which has a 12% cost of capital. Has estimated its cash-flows as shown in the following thable:

Initial Investment Project-A Project-B
Tk 1,30,000 Tk 85,000
Year Cash Inflows
1 Tk 25,000 40,000
2 35,000 35,000
3 45,000 30,000
4 50,000 10,000
5 55,000 5,000
  • Calculate the NPV and PI for each project.
  • Decide which project should be accepted and why by the firm.

(2010-Accounting /Finance/Management ) Part- ( C) Q. No-13. 13.

(2014 Accounting, Part-(C) = Q. No. 15).

Laila Chemical Company is considering a project that requires an investment of Tk 4,00,000. The estimated salvage value is zero. Tax rate is 50% and cost of capital is 12%. The company uses straight line depreciation and the proposed project cash flows before tax (CFBT) as follows:

At the end of year CFBT
1 Tk 1,00,000
2 Tk 1,00,000
3 Tk 1,50,000
4 Tk 1,50,000
5 Tk 2,50,000

Determine the following:

  • Payback Period (PBP).
  • Nett present value (NPV).
  • Internal rate of return (IRR).

 

(2015 -Accounting Part- (C )= Q. No. 16.

Maghna Co. is considering the purchase of a new machine, which will cost Tk 10,00,000. It is estimated that the machine which the machine will produce are as follows :

Year EBT
1 1,30,000
2 1,40,000
3 1,60,000
4 1,70,000
5 2,50,000
6 1,80,000
7 1,90,000

The company has a cost of capital 15% and on this basis, you are required to prepare a statement evaluating the project Assume that the corporate tax rate is 40%.

Calculate: (1) IRR. (2)  NPV. (3) NPI.

 

(2010-Accounting /Finance/Management ) Part- ( C) Q. No-13. 13.

 

(2016 Accounting Part-(B) = Q No-16 )

Taluker Enterprise is condising a new product line. The details of the investment proposals are as follows:

Initial cas outlay: Tk 1,00,000.

Expected life: 5 year.

Sdalvage value: Tk 10,00,000.

Working capital: Tk 20,000.

Cash flow before depreciation and taxes.

Year CFBT (Tk)
1 25,000
2 30,000
3 32,000
4 35,000
5 40,000

The project cost of capital is 10% and tax rate is 45%. Depreciation will be on straight-line basis. You are required to calculate :

  • Payback Period. (PBP).
  • Average Rate of Return (ARR).
  • Return on Investment (ROI).

 

(2017 Accounting Part-(B) = Q No- 5 )

 

(2017AccountingPart-(C) = Q No – 16.

Initial investment of a project is Tk 1,20,000. Life of the project is 5 year are. Cash inflows in 1st year, 2nd year, 3rd year, 4th year, and 5th year are Tk 50,000, 48,000, 30,000, 42,000, and 20,000, respectively. Cost of capital is 15%.

  • Calculate the Internal Rate of Return (IRR).
  • Should the project be accepted?

 

(2010-Accounting/Finance/Management) Part-(C) Q. No. 13

 

 (2018 Accounting Part-(C) = Q No. 16 )

A company is considering an investment proposal which requires an initial cash outlay of Tk 5,00,000. The project will have a salvage value of Tk 50,000 at the end of its estimated life of 5 years. The company uses straight-line depreciation method .Tax rate is 40% and cost of capital is 10%. The estimated cash flows before tax are as follows :

Year Cash flows (Tk)
1 1,20,000
2 1,40,000
3 1,60,000
4 1,80,000
5 2,00,000

Required :

  • Payback Period.
  • Surplus Life.
  • Nett Present Value.
  • Profitability Index.

 

 

 ( Part-(C) = Q No. 13 )

 

(2019 Part-(B) = Q No- 7 )

 

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