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