When considering which values to use in Investment Appraisal, only “Relevant Costs” are used. A company has identified the following costs involved in a project: (a) Project Manager salary £40,000. The Project Manager is currently an accountant paid £33,000 – when the project starts, a new accountant will be employed at a cost of £24,000. (b) The Project Office will be located in a current office; rent is £5,000. (c) The additional income is expected to be £500,000 before tax, which is payable at 25% The Relevant Costs are:

When considering which values to use in Investment Appraisal, only “Relevant Costs” are used. A company has identified the following costs involved in a project: (a) Project Manager salary £40,000. The Project Manager is currently an accountant paid £33,000 – when the project starts, a new accountant will be employed at a cost of £24,000. (b) The Project Office will be located in a current office; rent is £5,000. (c) The additional income is expected to be £500,000 before tax, which is payable at 25% The Relevant Costs are:

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter14: Multinational Capital Budgeting

Section: Chapter Questions

Problem 1ST

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