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