ABC Corporation is evaluating a project that requires an investment of Rs. 700 lakhs. The anticipated earnings (before depreciation and taxes) over the five years are:

• Year 1: Rs. 160 lakhs
• Year 2: Rs. 180 lakhs
• Year 3: Rs. 200 lakhs
• Year 4: Rs. 220 lakhs
• Year 5: Rs. 240 lakhs

The project will incur a 16% capital cost, with assets depreciating at 25% on a written-down value basis. The scrap value at the end of the term is Rs. 120 lakhs. Assume no taxes.

Requirements:

1. Determine the NPV of the project.
2. Assess the IRR.
3. Calculate the payback period.
4. Evaluate the accounting rate of return (ARR).
5. Make a recommendation based on your findings.