Calculate the Profitability index and Payback period

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Reference no: EM132805066

Question - Below is the information on the after-tax cash flows of Amani Sdn. Bhd. Assume that a new machine will have a 6-year useful life and the company requires a minimum return of 15%.

After-tax cash flows RM

Initial outlay 400,000

Annual differential cash flows 200,000

Terminal cash flows 25,000

Required - You are required to calculate

i. Payback period

ii. Net present value

iii. Profitability index

Reference no: EM132805066

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