ABC Ltd. has estimated cash inflow of year 1, 2 and 3 as ₹500 lakh, 1200 lakh and 1500 lakh respectively. The probability of success is 0.70, 0.65 and 0.75 respectively. The PV factor @ 10% for the year 1, 2 and 3 are 0.
CS Executive · Financial and Strategic Management · PYQS · December 2021
ABC Ltd. has estimated cash inflow of year 1, 2 and 3 as ₹500 lakh, 1200 lakh and 1500 lakh respectively. The probability of success is 0.70, 0.65 and 0.75 respectively. The PV factor @ 10% for the year 1, 2 and 3 are 0.909, 0.826 and 0.751 respectively. Estimated initial investment is ₹1500 lakh. The expected NPV is:
Answer & Explanation:
Correct Answer: Option (C)
Official answer key: (C).
Topics: Financial Management
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