: Mr. Kanhaiya Lal is working as a project manager in ABC Ltd. which is an oil refinery unit in Bhubaneshwar. There are 3 more project managers i.e., Mr. Ram, Mr. Shyam, and Mrs. Reema whom he shares the workplace. From past few years, the financial performance of ABC Ltd. had been not adequate in terms of production, sales and market growth. To deal with the current worsening financial condition of ABC Ltd, the project managers want to invest in projects that would help the company to take the path of financial growth. For the same, the company wants to have an investment named as Project X which will give returns for the coming years. Now, it is the duty of the project managers to evaluate the cashflows from the project X and inform the management whether to go for this project X investment or not. In line to this, the following are the expected year-wise cash flows from Project X:

Year Cash flow

0 -1,300,000

1 400,000

2 550,000

3 600,000

4 400,000

Also, the project X involves a cost of capital for ABC Ltd. at the rate of 17 percent. Considering the given information, use a capital budgeting technique for evaluating the investment in Project X. For the same, kindly answer the following questions: (i) What will be the net present value for Project X? (ii) What is the internal rate of return for project X?