Initial capital cost ₹100 crores, Annual unit sales 1.25 crores, Selling Price ₹100 per unit. Variable cost ₹50 per unit, Fixed Cost ₹12.50 crores per year, Cost of capital is 6%. What will be approx. % change in NPV for
CS Executive · Financial and Strategic Management · PYQS · December 2023
Initial capital cost ₹100 crores, Annual unit sales 1.25 crores, Selling Price ₹100 per unit. Variable cost ₹50 per unit, Fixed Cost ₹12.50 crores per year, Cost of capital is 6%. What will be approx. % change in NPV for 5% reduction in Sale Price per unit considering duration of the project is 3 years ? Ignore taxation and depreciation and assume no interest cost.
Answer & Explanation:
Correct Answer: Option (A)
Official answer key: (A).
Topics: Financial Management
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