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GVM Limited is considering a project with a life of 5 years. The expected cost of the project's machinery is Rs. 500 lakhs which will
GVM Limited is considering a project with a life of 5 years. The expected cost of the project's machinery is Rs. 500 lakhs which will be depreciated at 20% under WDV. The expected revenues and operating costs excluding depreciation would be Rs. 600 Lakhs per year and Rs. 420 Lakhs respectively. It has a term loan of Rs. 200 Lakhs whose principal amount is repayable in five equal instalments (yearend) along with applicable interest. The interest rates for term loans and bank finance (Rs 100 Lakhs for working capital) would be 10% and 12% respectively. The tax rate applicable to the company is 30%. Determine the operating cash inflows
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