Q.6. For a new project, the estimated project cost of buildings and machinery, rent for the land leased for building the manufacturing plant, sales and selling price of the product, and production and selling costs are given in the table below. At the end of year 6, the project will be discontinued- the building and machinery will be sold for Rs 5 million. Find NPV and payback period of the project if the discount rate is 10%. (Assume no taxes, and no other costs and revenue. All costs and revenue happen at the end of period.) Show all calculations. [4] Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Project Cost (Rs million) 20 30 Rent for leased land (Rs million) 2 2 2 2 2 3 Sales (million units) 1 2 2.2 2.5 Selling price (Rs/Unit) 30 30 30 30 Production and selling costs (Rs million) 15 18 20 25 Depreciation (Rs) 5 5 5 5

For a new project, the estimated project cost of buildings and machinery, rent for the land leased for building the manufacturing plant, sales and selling price of the product, and production and selling costs are given in the table below. At the end of year 6, the project will be discontinued- the building and machinery will be sold for Rs 5 million. Find NPV and payback period of the project if the discount rate is 10%. (Assume no taxes, and no other costs and revenue. All costs and revenue happen at the end of period.) Show all calculations. [4] Project Cost (Rs million) Rent for leased land (Rs million) Sales (million units) Selling price (Rs/Unit) Production and selling costs (Rs million) Depreciation (Rs) Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 20 30 2 2 2 2 2 3 1 2 2.2 2.5 30 30 30 30 15 18 20 25 5 5 5 5