ABC Ltd. is considering a new investment in batching plant about which the following information is available: (i) The total investment on the project consists of Rs. 70 lakh on plant and equipment. Entire outlay will be incurred at the beginning of the project. 1/3 (ii) Project will be financed with Rs. 20 lakh of equity capital, Rs. 40 lakh of long term debt in form of debentures, and Rs. 10 lakh of short term bank borrowings. Interest rate on debentures will be 15% and interest rate for bank borrowing will be 18%. (iii) The life of plant is expected to be 5 years and the plant would fetch a salvage yalue of Rs. 20 lakh. Expected revenues from the plant in the first year are Rs. 80 lakh which are expected to grow at the rate of 5% year on year. (V) Operating expenses will be Rs. 35 lakh per year which are expected to grow at the rate of 7.5% year on year. (vi) Tax rate = 30% (vii) Company has a policy to consider straight line depreciation. Work out post tax incremental cash flows for the project.