Company A has an offer to invest in three projects – B, C and D. However, Company A has funds to invest in only one project. So, it decided to use the NPV method to decide on the project that it should invest in. Which p

Company A has an offer to invest in three projects – B, C and D. However, Company A has funds to invest in only one project. So, it decided to use the NPV method to decide on the project that it should invest in. Which project should the company invest in ? Following are the details : Project B – ₹56,000 (Initial Investment), Cash flows for year, 1, 2 and 3 resp. (₹25,000; ₹20,000; ₹15,000), Risk-free rate is 2%, while Risk premium is 5%. Project C – ₹68,000 (Initial Investment), Cash flows for year 1, 2 and 3 resp. (₹32,000; ₹12,000; ₹35,000), Risk-free rate is 1.2%, while Risk premium is 4%. Project D – ₹85,000 (Initial Investment), Cash flows for year 1, 2 and 3 resp. (₹12,000; ₹30,000; ₹53,000), Risk-free rate is 3%, while Risk premium is 7%.