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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:
- Calculate the net present value (NPV).
- Determine the internal rate of return (IRR).
- Compute the payback period.
- Calculate the annual depreciation.
- Assess the financial feasibility of the project.
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