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MNO Ltd. is planning to invest in a project with the following cash flows: Year Cash Flow (Rs.) 0 -5,00,000 1 1,00,000 2 1,20,000 3
MNO Ltd. is planning to invest in a project with the following cash flows:
Year | Cash Flow (Rs.) |
0 | -5,00,000 |
1 | 1,00,000 |
2 | 1,20,000 |
3 | 1,50,000 |
4 | 1,80,000 |
5 | 2,00,000 |
- Depreciation: 20% on original cost
- Tax rate: 35%
Required:
- Calculate the Payback Period (PBP) and ARR.
- Determine the NPV and NPV Index at a 11% cost of capital.
- Compute the IRR.
- Evaluate the profitability index.
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