ABC Corp. is planning to invest Rs. 700 lakhs in a new venture. The expected earnings before depreciation and taxes are as follows for the next four years:

Year	1	2	3	4
Earnings (Rs.in lakhs)	240	250	260	270

• The cost of raising capital is 11%.
• Depreciation is to be charged at 20% on a Written Down Value basis.
• No scrap value at the end of the project.
• Assume zero income tax applicable.

Requirements:

• Compute the annual depreciation.
• Calculate the NPV of the project.
• Determine the IRR.
• Calculate the profitability index.
• Advise management on whether to proceed with the investment based on the calculated metrics.