ABC Company is planning to invest in a new project that will require BDT$10$ million of capital

investment for an economic life of $5$ years. The company is planning to maintain $50\%$ debt in its

capital structure and the rest will be financed from equity. The company conducted a market

survey to forecast expected future sales and the survey cost TK $500,000.$ Expected sales are $60,000$

units, $80,000$ units, $100,000$ units, $110,000$ units and $120,000$: expected selling prices are TK $350,$

TK $350,$ TK $360,$ TK $380$ and TK $400$: budgeted variable cost per unit is TK $200,$ TK $200,$ TK

$250,$ TK $260$ and TK $280$ respectively in next five years. Fixed costs per year is $1\mathrm{.}5$ million for

operating Expenses. The business will require $2$ million as working capital in the initial year and

it will increase $10\%$ each year up to year $4$ and remain same for rest of the project life. The working

capital will be financed by short term debt. The government charges $20\%$ Corporate Tax Rate and

$15\%$ capital gain Tax Rate. The project is expected to be sold at TK$2\mathrm{.}5$ million after the economic

life. Cost of debt is $10\%$ and expected cost of equity is $15\%.$

Based on the information evaluate the capital investment decision for ABC Company using the

following dictions criteria

NPV

IRR

Payback Period

Discounter Payback Period

Profitability Index