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GHI Pvt. Ltd. is considering a project with these projected cash flows: Year Cash Flow (Rs.) 0 -3,50,000 1 75,000 2 1,10,000 3 90,000 4

GHI Pvt. Ltd. is considering a project with these projected cash flows:

Year

Cash Flow (Rs.)

0

-3,50,000

1

75,000

2

1,10,000

3

90,000

4

95,000

5

1,50,000

6

1,20,000

  • Depreciation: 18% on original cost
  • Tax rate: 30%

Required:

  1. Calculate the Payback Period (PBP) and ARR.
  2. Compute NPV and NPV Index at a 10% cost of capital.
  3. Calculate IRR.
  4. Analyze the project’s profitability index.

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