Future Road Project Ltd., is considering a project as per following details: 1. The investment outlay in the project will Rs. 200 million. This consists of Rs. 150 million Plant and Machinery and heavy equipment and Rs. 50 million net working capital. 2. Project life is 7 years. At the end of seven year, project will fetch a net salvage value of Rs. 20 million and net working capital will be liquidated at book value. 3. The expected revenue from the project would be Rs. 250 million per year. 4. The operating cost (all-inclusive excepting depreciation, interest and tax) will be Rs. 200 million every year. 5. The Tax rate is 30% 6. Plant and machinery will be depreciated @ 25 per cent on written-down value (WDV) method. Calculate the net cash flow of the project and calculate project IRR. If the company is looking for project IRR of 20%, what one time grant (viability gap funding) it should seek for.

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