Mr. Waseem wants to start “Printing on Packages” business. He wants to start this business with 4 printing machines. He estimates that the required investment for the business is Rs. 40 Million. He projects that revenue (before tax and depreciation) from the business will be Rs.8 Million for the first year and it will keep on growing at a rate of 5.5% annually till the 10th year.
Some other information regarding the project is as follows:
• Annual depreciation will be Rs. 4 Million under the straight line method.
• Cost of capital is 10% while the rate of tax is 33%.
Suppose you are running a financial consultancy firm, Mr. Waseem wants to get his project evaluated by your firm. You have to suggest Mr. Waseem about the feasibility of the project after performing different techniques of financial analysis to start a new project.
BUSINESS FINANCE ACC501 ASSIGNMENT NO 02 Solution
