📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

  • google app store apple app store

    • Question

      An investment project costs ₹1,00,000 and is expected

      to generate cash inflows of ₹30,000 per year for 5 years. If the cost of capital is 10%, determine whether the project is financially viable based on Net Present Value (NPV). Use PV factor of 10% for 5 years = 3.7908.
      A NPV = ₹5,000; Accept Correct Answer Incorrect Answer
      B NPV = ₹12,000; Accept Correct Answer Incorrect Answer
      C NPV = ₹10,000; Accept Correct Answer Incorrect Answer
      D NPV = ₹13,724; Accept Correct Answer Incorrect Answer
      E NPV = ₹9,500; Reject Correct Answer Incorrect Answer

      Solution

      NPV = ₹30,000 × 3.7908 – ₹1,00,000 = ₹1,13,724 – ₹1,00,000 = ₹13,724

      Practice Next
      More Accounts Questions
      ask-question