Question
General Electronics Company Limited after-tax cash inflows (ATCI) are time dependent which means that First Year's results (ATCI) affect the cash flows of the Second
General Electronics Company Limited after-tax cash inflows (ATCI) are time dependent which means that First Year's results (ATCI) affect the cash flows of the Second Year as follows: If After Tax Cash Inflow for the 1st year is 120,000 with 40% probability, After Tax Cash Inflow for the If After Tax Cash Inflow for the 1st year is 225,000 with 50% probability, After Tax Cash Inflow for the If After Tax Cash Inflow for the 1st year is 300,000 with 10% probability, After Tax Cash Inflow for the Required: The project requires an initial investment of Rs. 300,000 and the risk-free rate of return after tax is 12%. Calculate Net Present Value of the project, its NPV Index and advise whether the project should be undertaken or not? Note: Provide full workings
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