a) You are planning to start a project. If the required initial outlay of the project is
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Question:
a) You are planning to start a project. If the required initial outlay of the project is ₹ 70,000 and estimated annual cash inflows are ₹ 30,000, ₹ 20,000, ₹ 18,000, ₹ 18,000, and ₹ 15,000 for the next 5 years respectively. Estimate the payback period of the project.
b) You have received a project proposal with a life expectancy of 5 years:
Particulars | Years | Amount in ₹
|
Initial Investment | 0
| 6,00,000 |
Cash inflows | 1 | 1,20,000
|
| 2 | 1,20,000 |
| 3 | 1,80,000 |
| 4 | 1,80,000 |
| 5 | 2,20,000 |
Calculate Net Present Value of project using the discount rate of 9%.
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