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UVW Ltd. is considering an investment project with the following details: Year Cash Flow (Rs.) 0 -4,00,000 1 80,000 2 90,000 3 1,00,000 4 1,10,000

UVW Ltd. is considering an investment project with the following details:

Year

Cash Flow (Rs.)

0

-4,00,000

1

80,000

2

90,000

3

1,00,000

4

1,10,000

5

1,20,000

  • Depreciation: 15% on original cost
  • Tax rate: 25%

Required:

  1. Calculate Payback Period (PBP) and ARR.
  2. Compute NPV and NPV Index with a 10% discount rate.
  3. Calculate IRR.
  4. Analyze the project’s profitability index.

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