The following are the data on capital expenditure of a project being evaluated by Management of Vivaan Limited: Particulars Annual cost savings ₹40,00,000 Useful life 4 years Internal Rate of Return 15% Profitability Ind

CS Professional · Financial, Treasury and Forex Management · PYQS · June 2017
The following are the data on capital expenditure of a project being evaluated by Management of Vivaan Limited: Particulars Annual cost savings ₹40,00,000 Useful life 4 years Internal Rate of Return 15% Profitability Index 1.064 From the above information find out the following by assuming that salvage value is zero: (iv) Net present value.

Answer & Explanation:

Net present value (NPV) NPV = Total present value of cash inflows - cost of the project = ₹1,21,50,880 - ₹1,14,20,000 = ₹7,30,880

Topics: Financial Management

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