Question
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). (PVIFA 10%, 5 yrs = 3.791).Solution
PV = 3,00,000 × 3.791 = ₹11,37,300. NPV = 11,37,300 – 10,00,000 = ₹1,37,300.
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