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ABC Ltd. is considering a project with the following details: Year Cash Inflows (Rs.) 1 1,00,000 2 1,20,000 3 1,50,000 4 90,000 5 60,000 Initial

ABC Ltd. is considering a project with the following details:

Year

Cash Inflows (Rs.)

1

1,00,000

2

1,20,000

3

1,50,000

4

90,000

5

60,000

Initial investment: Rs.4,50,000 Depreciation: 20% on the original cost Tax rate: 30%

Required:

  1. Calculate Payback Period (PBP).
  2. Calculate Accounting Rate of Return (ARR).
  3. Determine the Net Present Value (NPV) and Profitability Index (PI) at a discount rate of 10%.
  4. Compute the Internal Rate of Return (IRR).

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