Question: There are two mutually exclusive projects under active consideration of a company. Both the projects have a life of 5 years and have initial cash

There are two mutually exclusive projects under active consideration of a company. Both the projects have a life of 5 years and have initial cash outlays of Rs. 1,00,000 each. The company pays tax at 50% rate and the maximum required rate of the company has been givenas 10%. The straight line method of depreciation will be charged on the projects. The project X is expected to generate a net cash inflow before depreciation and taxes of Rs. 40,000 throughout its life and project Y is expected to generate a net cash inflow before depreciation and taxes of Rs. 60,000, 30,000, 20,000, 50,000 and 50,000 from one to five years respectively. Compute: PBP, ARR, NPV, PI, and IRR

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