Year P.V factor at 10% SECTION-C (Case Study- Compulsory Question) Case Study Q.N 06 + Total Marks:15 CO RBT L a. A company is considering an investment proposal to COS LS purchase a machine costing Rs.2,50,000. The machine has a life expectancy of five years and no salvage value. The company's tax rate is 40%. The firm uses straight line method for providing depreciation. The estimated cash flows before tax after depreciation (CFBT) from the machine are as follows: 0.909 Year 1 2 3 4 5 3 Calculate: a) Pay-back period b) Average rate of return c) BBA331 Page 3 of 4 CFBT (Rs) 60000 70000 90000 100000 150000 Net Present Value and d) Profitability Index at 10% discount rate. You may use the following table of present value (PV): 4 0.826 0.751 0.683 0.621 Revised Bloom's Taxonomy (RBT) Levels: L1-Remembering L2- Understanding LS-Evaluating L4-Analyzing L3-Applying L6-Creating