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.
More Capital Budgeting Questions
- Mutually exclusive projects: A (NPV=₹200, IRR=18%), B (NPV=₹250, IRR=15%). Cost of capital=12%. Which to select?
- According to IND AS 115, when can revenue be recognized?
- A project requires an investment of Rs. 10,00,000. It generates annual cash inflows of Rs. 3,00,000 for 5 years. If cost of capital is 10%, should the proj...
- Project requires initial investment of ₹10 lakhs. Annual cash inflows: Year1-₹2L, Year2-₹3L, Year3-₹4L, Year4-₹5L. Cost of capital 10%. NPV? (PV factors: 0...
- ABC Ltd. is evaluating two projects. Project A requires ₹50 lakhs investment and offers IRR of 14%. Project B requires ₹40 lakhs and gives IRR of 12%. The ...
- The discount rate that makes the NPV of a project equal to zero is called the:
- Which of the following budgets is considered the primary budget prepared in a business organization?
- Which method in capital budgeting considers the time value of money but ignores cash flows beyond payback?
- 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 cas...
- Project A requires investment of ₹10,00,000 with annual cash inflows of ₹3,00,000 for 5 years. Cost of capital = 10%. Compute Net Present Value (NPV). (PVI...
Hey! Ask a query
Please enter email id
The email must be a valid email address.
Please enter Mobile Number
Please enter valid Mobile Number
Please enter your Doubt