solution needed

16. An oil company proposes to install a pipeline for transport of crude from wells to refinery. Investments and operating costs of the pipeline vary for different sizes of pipelines (diameter). The following details have been conducted: (a) Pipeline diameter (in inches) 4 uni 6 7 entre - D (b) Investment required (Rs. lakhs) 16 24 36 64 150 (c) Gross annual savings in operating costs before depreciation (Rs. lakhs) 5 15 30 50 7:30-9:3 The estimated life of the installation is 10 years. The oil company's tax rate is 50%. There is no salvage value and straight line rate of depreciation is followed. ions for Calculate the net savings after tax and cash flow generation and recommend therefrom, the largest ramme pipeline to be installed, if the company desires a 15% post-tax return. Also indicate which pipeline will have the shortest payback. The annuity PV factor at 15% for 10 years is 5.019. Get Outlo