a) You are planning to start a project. If the required initial outlay of the project is * 70,000 and estimated annual cash inflows are 30,000, 20,000, 18,000, 18,000, and 15,000 for the next 5 years respectively. Estimate the payback period of the project. b) You have received a project proposal with a lifeexpectancy of 5 years: Particulars Years Amount in Initial Investment Cash inflows 1 2 3 4 0 5 1,20.000 1,20.000 6,00.000 1,80.000 1,80.000 2,20,000 Calculate the Net Present Value of the project using the discount rate of 9%.
a) You are planning to start a project. If the required initial outlay of the project is * 70,000 and estimated annual cash inflows are 30,000, 20,000, 18,000, 18,000, and 15,000 for the next 5 years respectively. Estimate the payback period of the project. b) You have received a project proposal with a lifeexpectancy of 5 years: Particulars Years Amount in Initial Investment Cash inflows 1 2 3 4 0 5 1,20.000 1,20.000 6,00.000 1,80.000 1,80.000 2,20,000 Calculate the Net Present Value of the project using the discount rate of 9%.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:a) You are planning to start a project. If the required initial outlay of the project is ₹ 70,000
and estimated annual cash inflows are 30,000, 20,000, 18,000, 18,000, and 15,000 for
the next 5 years respectively. Estimate the payback period of the project.
b) You have received a project proposal with a lifeexpectancy of 5 years:
Particulars Years Amount in
Initial Investment 0
Cash inflows 1
2
3
4
5
1,20.000
1,20.000
1,80.000
1,80.000
6.00.000
2,20,000
Calculate the Net Present Value of the project using the discount rate of 9%.
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