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Projects and Cash Flows (in ): Projects C C C C C E -15,000 5,000 3,000 2,000 10,000 F -20,000 6,000 4,000 5,000 8,000 G

Projects and Cash Flows (in ₹):

Projects

C₀

C₁

C₂

C₃

C₄

E

-15,000

5,000

3,000

2,000

10,000

F

-20,000

6,000

4,000

5,000

8,000

G

-10,000

2,500

3,500

1,500

4,500

H

-5,000

1,500

1,000

2,000

3,000

Required:

  1. Calculate the payback period for each project.
  2. If the standard payback period is 3 years, which project will you select?
  3. If the cost of capital is 12%, compute the discounted payback period for each project.
  4. Compute the NPV of each project and determine which project to recommend based on the NPV criterion.
  5. Calculate the profitability index (PI) for each project.

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