Question

With project cost of Rs.300 lakh and cost of capital at

Q: With project cost of Rs.300 lakh and cost of capital at 12%, the estimated profits over its lifetime

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12%, the estimated profits over its lifetime of 5 years are Rs.10 lakh, Rs.10 lakh, Rs.30 lakh, Rs.40 lakh and Rs.50 lakh respectively. If the discount factors @ 12%, for the first five years are 0.89, 0.80, 0.71, 0.64 and 0.57 respectively, what is the net present value of project?

A Rs.92.30 lakh

B Rs.140 lakh

C Rs.(-) 160.40 lakh

D Rs.(-)207.70 lakh

E Rs.392.30 lakh

Practice Next

Inflow (profits)	Discount factor	Present Value
10,00,000	0.89	8,90,000
10,00,000	0.80	8,00,000
30,00,000	0.71	21,30,000
40,00,000	0.64	25,60,000
50,00,000	0.57	28,50,000
Total		92,30,000

Question

With project cost of Rs.300 lakh and cost of capital at

Solution

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