Question: B Ltd. is evaluating a project that requires an initial investment of Rs.5,00,000. The project is expected to generate the following annual cash flows: Year

B Ltd. is evaluating a project that requires an initial investment of Rs.5,00,000. The project is expected to generate the following annual cash flows:

Year	Cash Flow (Rs.)
1	1,50,000
2	2,00,000
3	1,75,000
4	1,50,000
5	1,25,000

The project will be depreciated on a straight-line basis over its life with no salvage value. The company's tax rate is 30% and the required rate of return is 10%.

Required:

Calculate the Payback Period.
Calculate the ARR.
Compute the NPV.
Determine the Profitability Index.
Calculate the IRR.

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