Q.-02 A company is considering an investment proposal to install new milling machine. The project will cost Rs.50,000. The facility has a life expectancy of 5 years and no salvage value. The company tax rate is 40%. Firm uses straight-line method for depreciation. The estimated earning before tax from the proposed investment plan are as under. Year Earning before tax Rs. 22,000 18,000 14,000 15,000 25,000 12345 Compute cash flow for 5 years. Calculate: 1. Payback period 2. Profitability Index 3. IRR 4. NPV( discount rate is 15%)