Question

A company is evaluating two mutually exclusive projects, A and B, both requiring an initial investment of ₹1,50,00,000. The cost of capital is 10%. The cash flows for each project over 5 years are as follows: • Project A: ₹45,00,000 each year • Project B: ₹20,00,000, ₹40,00,000, ₹60,00,000, ₹50,00,000, ₹40,00,000 Calculate the Net Present Value (NP

  • V of each project and determine which project should be selected.
A Project A; NPV ₹21,67,750
B Project B; NPV ₹23,84,250
C Project A; NPV ₹20,59,500
D Project B; NPV ₹28,64,370
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