Question
Raman Ltd. is evaluating a new machine costing ₹60
lakhs with a useful life of 5 years. The expected annual operating cash inflows (after-tax) are ₹18 lakhs. The machine will be depreciated straight-line to zero but will have a salvage value of ₹10 lakhs at the end of 5 years. The company’s tax rate is 30%, and the cost of capital is 12%. The present value factors (12%) for 5 years are: Year 1: 0.893, Year 2: 0.797, Year 3: 0.712, Year 4: 0.636, Year 5: 0.567 PV of ₹1 after 5 years = 0.567 Cumulative PV factor = 3.605 What is the NPV of the project?Solution
Annual inflows = ₹18L for 5 years PV of inflows = 18 × 3.605 = ₹64.89L Tax on salvage = ₹10L × 30% = ₹3L → Net Salvage = ₹7L PV of Salvage = 7 × 0.567 = ₹3.969L Total PV = 64.89 + 3.969 = ₹68.86L NPV = 68.86 – 60 = ₹8.86L
Which of the following elements should be placed in the blank spaces respectively (in the same order from left to right) in order to complete the given ...
In which of the following expressions will the expression ‘S > R’ and ‘W < T’ be definitely false?
Statements: Q = R; S ≥ T; P ≤ Q; R > V; R > S; T ≥ U
Conclusions:
(i) R > U (ii) V ≥ U (iii) P = R (iv) P < R
...Statements: R © K, K * N, N $ J, J % H
Conclusions: I.R $ N II.J @ K �...
In the question, relationship between some elements is shown in the statements (s). These statements are followed by two conclusions. Read the statemen...
Statements: H ≥ R, T < L, R ≥ T, L < N > I
Conclusion:
I. R > I
II. N ≥ T
Statement: C < X ≤ B > E < L < I
Conclusion: I. X > L II. B > C
Statements: J > A > G < N < K = V
Conclusion
I. J > K
II. V > A
...Statements: K ≥ R, M > T, M ≥ R, L = K < O
Conclusion:
I. M > K
II. O > R
Statement: C ≥ D > E < F ≥ G; D ≥ H = J
Conclusion:
I. C > H
II. C = J
