KTN Spinning Mills is considering pruchase of a new machinery. The machinery costs $10 million and the expected Rs/$ exchange rate at the time of purchase is Rs.67. The machinery is expected to result in pre-tax cost savings of Rs.20 crores over the next five years, after which the machinery will be sold as scrap for Rs.5 crores. The cost of capital for the company is 13%. Calcualte the NPV and IRR and recommend whether the investment should be made or not

3 I KTN Spinning Mills is considering pruchase of a new machinery. The machinery costs $10 million and the expected "Rs/\$ exchange rate at the time of purchase is Rs.67. The machinery is expected to result in pre-tax cost savings of IRs. 20 crores over the next five years, after which the machinery will be sold as scrap for Rs.5 crores. The cost of icapital for the company is 13%. Calcualte the NPV and IRR and recommend whether the investment should be made or not