Solution-Compute the payback period for the proposed

Compute the payback period for the proposed investment

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Reference no: EM133100082

Question - The management of WYT Bank is considering an investment in automatic teller machines. The machines would cost RM124,200 and have a useful life of seven years. The bank's controller has estimated that the automatic teller machines will save the bank RM27,000 after taxes during each year of their life (including the depreciation tax shield). The machines will have no salvage value.

(a) Compute the payback period for the proposed investment.

(b) Calculate the net present value of the proposed investment assuming an after-tax hurdle rate of:

i. 10%.

ii. 12%

Reference no: EM133100082

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Compute the payback period for the proposed investment

Reference no: EM133100082

Reference no: EM133100082

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