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VWX Corporation is planning to invest Rs.3,00,000 in a new project. The project is expected to last for 5 years with no residual value. The
VWX Corporation is planning to invest Rs.3,00,000 in a new project. The project is expected to last for 5 years with no residual value. The expected annual cash flows after depreciation but before tax are:
- Year 1: Rs. 90,000
- Year 2: Rs. 1,00,000
- Year 3: Rs. 80,000
- Year 4: Rs. 70,000
- Year 5: Rs. 60,000
The project will be depreciated at 20% annually, and the company's tax rate is 27%. Calculate the following:
- Payback Period (PBP).
- Accounting Rate of Return (ARR).
- Net Present Value (NPV) and Profitability Index (PI) with a cost of capital of 10%.
- Internal Rate of Return (IRR).
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