A project requires an initial outlay of ₹5 Lakh. It is expected to generate annual CFAT of ₹1,25,000 through its useful life of years 1 to 5 excluding the scrap value of ₹1 Lakh to be realized at the end of 5th year. The

CS Executive · Financial and Strategic Management · PYQS · June 2022
A project requires an initial outlay of ₹5 Lakh. It is expected to generate annual CFAT of ₹1,25,000 through its useful life of years 1 to 5 excluding the scrap value of ₹1 Lakh to be realized at the end of 5th year. The Internal Rate of Return (IRR) of the project will be in the range of:
(A) 10%-11%
(B) 11%-12%
(C) 12%-13%
(D) 13%-14%

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Financial Management

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