Q.8. Delta Limited provides you the following information related to a project: Net Present Value Rs 17,00,424 Profitability Index 3 Life of Project 3 years Cost of Capital 10% Calculate the Payback period and Discounted Payback period if the project generates annual cash inflows equally. Q.9. XYZ Limited is considering the purchase of a new machine which will carry out some operations performed by labour. A and B are alternative models. From the following information you are required to prepare a profitability statement and explain which model will you recommend on the basis of pay- back period method? Machine B 6 Rs. 2,50,000 8,000 15,000 Machine A Estimated life of 5 Machine (Years) Rs. Cost of Machine 1,50,000 Cost of Indirect 6,000 Materials per annum Estimated Savings in 10,000 Scrap per annum Additional cost of 19,000 maintenance per annum Estimated savings in direct wages: Number of employees not required during the 150 year 27,000 200 Wages per employee on yearly basis (in Rs.) 600 600 Taxation is to be regarded as 50 % of profits. Ignore depreciation for calculation of tax