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An enterprise is considering a capital investment of Rs. 700 lakhs. The projected annual cash flows from the investment are as follows: Year Cash Flow

An enterprise is considering a capital investment of Rs. 700 lakhs. The projected annual cash flows from the investment are as follows:

Year

Cash Flow (Rs. in lakhs)

1

160

2

180

3

200

4

220

5

240

6

260

The discount rate applicable is 15%, and the depreciation is calculated using the declining balance method at a rate of 25%. The asset's residual value is Rs. 90 lakhs.

Required:

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

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