Calculate pay back period and average rate of return

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Reference no: EM132642025

Honey & Company wants to invest Tk. 60,000 in a new project.

The duration of project is 6 (six) years and salvage value is Tk. 6,000. The company uses straight-line method of depreciation. The company tax rate is 40%. The expected cash inflows from the project are given below:

Years Cash Inflow (Tk.)

1 15,000

2 25,000

3 30,000

4 10,000

5 5,000

6 5,000

Calculate Pay Back Period (PBP) and Average Rate of Return (ARR).

Reference no: EM132642025

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