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Calculate project npv and payback period

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A) A project costs tk 98,000 and is expected to generate cash inflows of tk48,000, tk 42,000 and tk 36,000 at the end of each year for next 3 years. If the discount rate is 12% calculate project's NPV and payback period.

B) A firm has net operating income of tk 100,000 and investment of tk 500,000 in assets. Using the NOI approach and an overall capitalization rate of 12 per cent, compute the total value of the firm, value of shares and the cost of equity if the firm has (i) no debt, (ii) tk 300,000 debt, (iii) tk 600,000 debt. Assume at 12 per cent rate of interest on debt and zero tax rate.

Reference no: EM133076675

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