Question

ABC Ltd. is evaluating a project requiring an initial investment of ₹50 lakhs. The project is expected to generate cash flows of ₹15 lakhs per year for the next 5 years. The company’s cost of capital is 10%. Calculate the NPV and suggest whether the project should be accepted.

A NPV is positive; accept the project
B NPV is negative; reject the project
C NPV is zero; accept if strategic
D Insufficient data
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