Marks 10 (2, 4, 4) Question # 5. Consider two proposed manufacturing plants: a conventional plant and a highly automated one. Both plants are designed to have a life of 10 years. Other important information of each plant is given below: PLANT-A Initial Capital Investment Rs.6,250,000 Yearly output Y1 Y2 Y3 5000 8000 10000 Salvage Value Rs.625,000 Y4 11000 Y5 12000 Y6 & above 12500 Fixed cost per year Variable cost per unit Rs.500,000 Rs.200 PLANT-B Initial Capital Cost Yearly Output Salvage Value Fixed Cost per year Variable Cost per unit Rs.2.500.000 10000 units from year one Nil Rs.250,000 Rs.275 Considering sale price of Rs.350 per unit and using discount rate of 15% per year prepare following analysis for each unit and give your suggestion that which project is more viable economically 1. Table of Actual and Discounted Cash Flows 2. Calculate Net Future Value 3. Calculate Payback period 4. Calculate NPV 5. Calculate Cost Benefit Ratio 6. Calculate IRR while using rate of 15% or 16% for both plants and decide that which rate is pertains to which project. Marks 22 (4, 4, 2, 4, 2, 4, 2)