Question
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 project be accepted based on NPV? (PV factor of annuity of Rs. 1 for 5 years @10% = 3.791).
More Capital Budgeting Questions
- Which of the following is/are examples of capital expenditure?
- At the end of the accounting year, all the nominal accounts of the ledger book are:
- 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 Net Present Value (NPV) of a project is:
- A firm is considering replacing its old machine with a new one. Old machine: Book value = ₹8L, Salvage = ₹2L New machine: Cost = ₹20L, Life = 5 years An...
- Which of the following is a non-discounting technique of capital budgeting?
- All of the following are capital receipts, except ________
- A firm evaluating two mutually exclusive projects uses NPV and IRR. Project A has higher NPV but lower IRR than Project B. Which project should be selected...
- Project X has an initial outflow of ₹6,00,000 and is expected to generate cash inflows of ₹2,50,000, ₹3,00,000, and ₹2,00,000 over the next 3 years. If the...
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
