1. The details of estimated project cost, sales and selling price of the product, depreciation and salvage value of a new project are given in the table below. All revenues and costs occur at the end of the period. The income tax rate is 20%. a) Find NPV of the project if the discount rate is 10%. b) The promoters has invested Rs 55 million in Year 1 and Rs 35 million in Year 2. Prepare the cash flow statement (Sources of funds and Disposition of funds). Show all calculations. [5]

	Year-1	Year-2	Year-3	Year-4	Year-5	Year-6
Project Cost (Rs million)	50	30
Sales (million units)			3	4	5	5
Selling price (Rs/Unit)			10	15	20	20
Cost of production (Rs million)			20	50	80	70
Depreciation (Rs million)			2	2	2	2
Salvage value (Rs million)						20