A company has invested ₹7,00,000 in a project, ₹5,00,000 initially and remaining at the end of first year. It also invested ₹2,00,000 in working capital at the end of 2nd year, which released back by the end of project l

CS Executive · Financial and Strategic Management · PYQS · December 2022
A company has invested ₹7,00,000 in a project, ₹5,00,000 initially and remaining at the end of first year. It also invested ₹2,00,000 in working capital at the end of 2nd year, which released back by the end of project life of 5 years. The scrap value realized from project at the end was ₹1,50,000. The project generated Cash inflows of ₹2,00,000 p.a. through years 1 to 5. If the required rate of return is 12% p.a., the approx. NPV of the project is : (A) ₹81,500 (B) ₹83,809 (C) ₹44,217 (D) The project has a negative NPV
(A) ₹81,500
(B) ₹83,809
(C) ₹44,217
(D) The project has a negative NPV

Answer & Explanation:

Correct Answer: Option (A)

Official answer key: (A).

Topics: Financial Management

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