A firm whose cost of capital is 10% is considering two mutually exclusive projects X and Y, the details of which are: Year Project X Project Y Cost Rs. 70,000 Rs. 70,000 Cash Inflows 1 Rs. 10,000 Rs. 50,000 Rs. 20,000 Rs. 40,000 3 Rs. 30,000 Rs. 20,000 4 Rs. 45,000 Rs. 10,000 5 Rs. 60,000 Rs. 10,000 Compute the Net Present Value at 10%, Profitability Index, and Internal Rate of Return of the two projects. 2.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A firm whose cost of capital is 10% is considering two mutually exclusive projects X and Y, the details of
which are:
Year
Project X
Project Y
Cost
Rs. 70,000
Rs. 70,000
Cash Inflows 1
Rs. 10,000
Rs. 50,000
Rs. 20,000
Rs. 40,000
3
Rs. 30,000
Rs. 20,000
4
Rs. 45,000
Rs. 10,000
5
Rs. 60,000
Rs. 10,000
Compute the Net Present Value at 10%, Profitability Index, and Internal Rate of Return of the two
projects.
2.
Transcribed Image Text:A firm whose cost of capital is 10% is considering two mutually exclusive projects X and Y, the details of which are: Year Project X Project Y Cost Rs. 70,000 Rs. 70,000 Cash Inflows 1 Rs. 10,000 Rs. 50,000 Rs. 20,000 Rs. 40,000 3 Rs. 30,000 Rs. 20,000 4 Rs. 45,000 Rs. 10,000 5 Rs. 60,000 Rs. 10,000 Compute the Net Present Value at 10%, Profitability Index, and Internal Rate of Return of the two projects. 2.
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