Nile Co ltd wants to start a power project with a total cash outlay of Rs 48000
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Question:
Nile Co ltd wants to start a power project with a total cash outlay of Rs 48000 crores to be invested equally at the beginning and 2ndyear of the project period of eight years. It gets a cash inflow of Rs 18000 crores upto 4thyear and thereafter the cash inflow increases at a rate of 20% every year over the previous year. Terminal Value of the asset is Rs 10000 crores and discounting rate for evaluating the project is 10%. Find out NPV of the company and comment on the acceptability of the project.
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