A machine is expected to require an initial outlay of ₹ 3,50,000 with useful life of four years, straight line method of depreciation and scrap value of ₹ 30,000. If it generates CFAT of ₹ 1,10,000, ₹ 1,50,000, ₹ 1,75,00

CS Executive · Financial and Strategic Management · PYQS · December 2024
A machine is expected to require an initial outlay of ₹ 3,50,000 with useful life of four years, straight line method of depreciation and scrap value of ₹ 30,000. If it generates CFAT of ₹ 1,10,000, ₹ 1,50,000, ₹ 1,75,000 and ₹ 1,40,000 respectively through years 1 to 4 and cost of capital and applicable income tax rates are 10% and 30% respectively, the NPV of the project will be :
(A) ₹ 93,486
(B) ₹ 1,00,935
(C) ₹ 84,500
(D) ₹ 1,21,425

Answer & Explanation:

Correct Answer: Option (D)

Official answer key: (D).

Topics: Financial Management

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