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PQR Ltd. is evaluating a project with the following cash flows: Year Cash Flow (Rs.) 0 -2,00,000 1 45,000 2 55,000 3 65,000 4 75,000

PQR Ltd. is evaluating a project with the following cash flows:

Year

Cash Flow (Rs.)

0

-2,00,000

1

45,000

2

55,000

3

65,000

4

75,000

5

85,000

  • Depreciation: 10% on original cost
  • Tax rate: 30%

Required:

  1. Calculate Payback Period (PBP) and ARR.
  2. Compute NPV and NPV Index with a 9% discount rate.
  3. Calculate IRR.
  4. Analyze the profitability index.

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