Interested to Buy Any Domain ? << Click Here >> for more details...
Answer Posted / sai kumar
capital budgeting is the long term finance technique where
the current funds are invested and gets the benifits over a
series of years....
| Is This Answer Correct ? | 16 Yes | 2 No |
Post New Answer View All Answers
DHPL is a small sized firm manufacturing hand tools. It manufacturing plan is situated in haryana. The company's sales in the year ending on 31st march 2007 were Rs.1000 million(Rs.100 crore) on an asset base of Rs.650 million. The net profit of the company was Rs.76 million. The management of the company wants to improve profitability further. The required rate of the company is 14 percent.The company is currently considering an investment proposal. One is to expand its manufacturing capacity. The estimated cost of the new equipment is Rs.250 million. It is expected to have an economic life of 10 years. The accountant forecasts that net cash inflows would be Rs.45 million per annum for the first three years, Rs.68 million per annum from year four to year eight and for the remaining two years Rs.30 million per annum. The plant can be sold for Rs.200 million: (a) The company can borrow funds from a nationalized bank at the interest rate of 14 percent for 10 years. It will be required to pay equal annum installment of interest and repayment of principal. (b) A financial institution has offered to lend money to DHPL at 13.5 per annum but it needs to pay equated quarterly installment of interest and repayment of principal. Questions: (1) Should the company expand its capacity? show the computation of NPV. (2) What is the annual installment of bank loan? (3) calculate the quarterly installment of the financial institution loan. (4) should the company borrow from the bank of from the financial institution?
Tell us did you use accounting applications at your previous companies or prefer working manually?
Plz Ask from me New Accounting Questions.
What can go wrong if you have a balance sheet with a lot of debt? What can go wrong if there is negative owner's equity? What does a good cash flow statement look like and why?
What is Capital Commitments means?
What is meant by turnover?
What is the formula for acid test ratio in accounting?
how to individual capital account.
give me examples of the accounting reports you have prepared
What is a cpa?
Tell me deferred taxation is a part of which equity?
export sales contract and domestic sales contract? india's trade in commercial services?
Define fair value accounting?
Tell me what would you say are the most important qualities of an account manager?
How can you made payment when bill come from vendor, what is the bills have you check.
