RST Ltd. is considering a project with the following details: Year Cash Flow (Rs.) 0 -6,00,000 1
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Question:
RST Ltd. is considering a project with the following details:
Year | Cash Flow (Rs.) |
0 | -6,00,000 |
1 | 1,20,000 |
2 | 1,50,000 |
3 | 1,80,000 |
4 | 2,10,000 |
5 | 2,40,000 |
- Depreciation: 25% on original cost
- Tax rate: 20%
Required:
- Calculate Payback Period (PBP) and ARR.
- Determine NPV and NPV Index at a 12% cost of capital.
- Compute the IRR.
- Evaluate the profitability index.
Related Book For
Lectures On Corporate Finance
ISBN: 9789812568991
2nd Edition
Authors: Peter L Bossaerts, Bernt Arne Odegaard
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