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Company Q is considering a new project that requires an initial investment of Rs.2,80,000. The project is expected to generate the following cash inflows: Year
Company Q is considering a new project that requires an initial investment of Rs.2,80,000. The project is expected to generate the following cash inflows:
- Year 1: Rs. 70,000
- Year 2: Rs. 80,000
- Year 3: Rs. 75,000
- Year 4: Rs. 60,000
- Year 5: Rs. 55,000
The project will be depreciated on a straight-line basis over its life. The tax rate is 30% and the discount rate is 9%.
Required:
- Calculate the Payback Period.
- Determine the ARR.
- Compute the NPV.
- Calculate the Profitability Index.
- Determine the IRR.
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