SP Limited Company is having two projects, requiring a capital outflow of Rs. 3,00,000. The expected annual income after depreciation but before tax is as follows:

Year	Rs.
1	9,000
2	80,000
3	70,000
4	60,000
5	50,000

Depreciation may be taken as 20% of original cost and taxation at 50% of Net Income.

Calculate:

(a) Net present value

(b) Net present value index.

Answer rating: 100% (QA)

a Net present value Depreciation per Year 20 Rs 30000000 Rs 6000000 As there is no clue about the co... View the full answer