ABC Ltd is considering undertaking a project, which will involve an initial outlay of Rs.3,00,000. The project has the following cash flows associated with it: ‘000 Year 1 cash inflows 100 Year 2 cash inflows 150 Year 3 cash inflows 200 If a discount rate of 10% is used to calculate the NPV of the project, which of the following statements is correct? (Assume the cash flows arise at the end of each year.) A. The project will yield a positive NPV of Rs. 65.5k and have a payback period of 2 years and 3 months B. The project will yield a positive NPV of Rs. 65.5k and have a payback period of 2 years and 9 months C. The project will yield a positive NPV of Rs. 365.5k and have a payback period of 2 years and 3 months D. The project w
ABC Ltd is considering undertaking a project, which will involve an initial outlay of
Rs.3,00,000. The project has the following cash flows associated with it:
‘000
Year 1
Year 2 cash inflows 150
Year 3 cash inflows 200
If a discount rate of 10% is used to calculate the NPV of the project, which of the following
statements is correct? (Assume the cash flows arise at the end of each year.)
A. The project will yield a positive NPV of Rs. 65.5k and have a payback period of 2 years
and 3 months
B. The project will yield a positive NPV of Rs. 65.5k and have a payback period of 2 years
and 9 months
C. The project will yield a positive NPV of Rs. 365.5k and have a payback period of 2 years
and 3 months
D. The project will yield a positive NPV of Rs. 365.5k and have a payback period of 2 years
and 9 months
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