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