A business is considering expanding its operations with an investment of Rs. 600 lakhs in new technology. The projected earnings before depreciation and taxes over the next six years are given below:

• Year 1: Rs. 250 lakhs
• Year 2: Rs. 260 lakhs
• Year 3: Rs. 270 lakhs
• Year 4: Rs. 280 lakhs
• Year 5: Rs. 290 lakhs
• Year 6: Rs. 300 lakhs

Additional information:

• The cost of capital is 14%.
• Depreciation is to be charged at 25% on a Written Down Value basis.
• The equipment will have a scrap value of Rs. 50 lakhs at the end of six years.
• The income tax rate applicable is 30%.

Requirements:

• Compute the annual depreciation.
• Calculate the NPV of the project.
• Compute the IRR of the project.
• Determine the profitability index (PI).