6. Equipment A has a cost of Rs.75,000 and net cash flow of
Rs.20000 per year for six years. A substitute equipment B
would cost Rs.50,000 and generate net cash flow of
Rs.14,000 per year for six years. The required rate of
return of both equipments is 11 per cent. Calculate the IRR
and NPV for the equipments. Which equipment should be
accepted and why?
Answer Posted / w.a
npv of equipment A= Rs 9610.76
npv of equipment B= Rs 9227.53
hence, equipment A should be accepted because it generates
a higher NPV value than equipment A.
Is This Answer Correct ? | 45 Yes | 12 No |
Post New Answer View All Answers
What is the difference between Partnership and Company ?
Do you know what giffen goods are?
explain about your MBA project and what u absorbed nd learned in that time
What is the post- dated cheque?
Where do you come from? What is the specialty of your home town?
What is Repo Rate? What is CRR Rate in India?
Do you know about NPA?
Define the terms- underwriting, sales, agent.
How To Create A Organizational Group?
Who endorses Bank of Baroda Brand?
What is Capital of a Company?
What significant trends do you see in the future in this field?
Define Call Money Rate?
Mention some of the topics that Actuary should be proficient in?
What is the source of funds for RRBs?