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 )