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ABC Corporation is considering an investment project with the following cash flows: Year Cash Flow (Rs.) 0 -2,50,000 1 60,000 2 70,000 3 80,000 4
ABC Corporation is considering an investment project with the following cash flows:
Year | Cash Flow (Rs.) |
0 | -2,50,000 |
1 | 60,000 |
2 | 70,000 |
3 | 80,000 |
4 | 90,000 |
5 | 1,20,000 |
- Depreciation: 20% on original cost
- Tax rate: 35%
Required:
- Calculate the Payback Period (PBP) and ARR.
- Calculate the NPV and NPV Index if the cost of capital is 8%.
- Compute the IRR.
- Determine the project’s profitability index.
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