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A company plans to invest 250 lakhs in a new technology expected to generate the following net income over the next six years: Year Net

A company plans to invest ₹250 lakhs in a new technology expected to generate the following net income over the next six years:

Year

Net Income (₹ in lakhs)

1

80

2

90

3

100

4

110

5

120

6

130

Depreciation is calculated at 30% per year on a straight-line basis. The cost of capital is 16%. The salvage value of the investment after six years is ₹30 lakhs.

Required:

  1. Compute the NPV of the investment.
  2. Determine the IRR of the investment.
  3. Calculate the Accounting Rate of Return (ARR).
  4. Analyze the project's Discounted Payback Period.

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