Question: JKL Enterprises is considering a project with the following expected cash flows: Year Cash Flow (Rs.) 0 -1,80,000 1 50,000 2 60,000 3 70,000 4
JKL Enterprises is considering a project with the following expected cash flows:
Year | Cash Flow (Rs.) |
0 | -1,80,000 |
1 | 50,000 |
2 | 60,000 |
3 | 70,000 |
4 | 55,000 |
5 | 50,000 |
- Depreciation: 12% on original cost
- Tax rate: 25%
Required:
- Calculate Payback Period (PBP) and ARR.
- Compute NPV and NPV Index with a 7% discount rate.
- Calculate IRR.
- Determine the profitability index.
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