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ABC Ltd. plans to invest Rs. 1,500 lakhs in a new plant. The expected cash inflows from the plant over five years are: Year Cash

ABC Ltd. plans to invest Rs. 1,500 lakhs in a new plant. The expected cash inflows from the plant over five years are:

Year

Cash Flow (Rs. in lakhs)

1

350

2

370

3

390

4

410

5

430

The discount rate is 12%, and the plant will depreciate at 15% on a written-down value basis. The residual value after five years is Rs. 180 lakhs.

Required:

  1. Calculate the net present value (NPV).
  2. Determine the internal rate of return (IRR).
  3. Compute the payback period.
  4. Calculate the annual depreciation.
  5. Assess the financial feasibility of the project.

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