The following data is available for a project: Initial investment = Rs 10 crore (incl. working capital
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The following data is available for a project:
Initial investment = Rs 10 crore (incl. working capital of Rs 2.5 crore)
Expected life = 8 years Salvage value = 50 percent of initial investment First year sales = Rs 6 crore Growth rate in sales = 7.5 percent Operating profit margin = 10 percent Tax rate = 35 percent Cost of capital = 17 percent Increase in W.C. = 5 percent Depreciation is provided on a straight-line basis. Estimate cash flows and NPV. Conduct a sensitivity analysis by changing key assumptions.
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