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Q . 4 Firm purchased plant Rs . 1 5 0 , 0 0 0 ; foundation cost paid 1 0 , 0 0 0

Q.4 Firm purchased plant Rs.150,000; foundation cost paid 10,000 and installation Rs.20,000. Project is forecast for five years, details are as follows: Sales 15000 units [growth of sales by 20% for first two years and then 10% for rest of the project life]. Working capital required at the start of project 10,000. Sales price 25 per unit Variable cost of sales Rs.8 per unit Fixed expenses Rs.10,000(excluding depreciation)Firm uses diminishing Balance Method [rate20%] and tax rate 40%. Assume that plant sold at the end of the project equal to its book value. Cost of capital 15%.CalculateNPV and IR
Use all 4 methods of depreciation

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