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JKL Corporation is assessing a project with an initial investment of Rs.2,50,000. The project's lifespan is 5 years, and it will have no salvage value.

JKL Corporation is assessing a project with an initial investment of Rs.2,50,000. The project's lifespan is 5 years, and it will have no salvage value. The expected annual profits after depreciation but before tax are:

  • Year 1: Rs. 70,000
  • Year 2: Rs. 85,000
  • Year 3: Rs. 95,000
  • Year 4: Rs. 60,000
  • Year 5: Rs. 50,000

Depreciation is calculated at 20% per year on the original cost, and the tax rate is 30%. Calculate the following:

  1. Payback Period (PBP).
  2. Accounting Rate of Return (ARR).
  3. Net Present Value (NPV) and Profitability Index (PI) assuming a discount rate of 11%.
Internal Rate of Return (IRR).

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