Question

An infrastructure firm is evaluating a bridge construction proposal requiring an initial capital expenditure of ₹800 Lakhs. The total Present Value (P

  • V of all projected future toll inflows discounted at the company's cost of capital is ₹950 Lakhs. What is the Net Present Value (NP
  • V of this project, and should the board approve it?
A NPV = -₹150 Lakhs; Reject the project
B NPV = +₹150 Lakhs; Accept the project
C NPV = +₹950 Lakhs; Accept the project
D NPV = +1.18; Accept the project
E NPV = ₹0; Be indifferent
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