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2,00,000 26,000 30,000 50 40,000.00 30,000 Year 0 -2,00,000 Year 1 0 16000

Coporate tax rate Return on Investment Capital tax gain

40% 12% 20%

Year 2 0 16000

Year 3 0 16000

Year 4 0 16000

Year 5 0 16000 -10000 50,000 520000 576000 15,00,000 -13,00,000 2,00,000 -30,000 -75,000 95,000 -38,000 57,000 6,33,000 359181.1997

-520000 -7,20,000

16000 15,00,000 -13,00,000 2,00,000 -30,000 -75,000 95,000 -38,000 57,000

16000 15,00,000 -13,00,000 2,00,000 -30,000 -75,000 95,000 -38,000 57,000 73,000

16000 15,00,000 -13,00,000 2,00,000 -30,000 -75,000 95,000 -38,000 57,000 73,000 51959.95809

16000 15,00,000 -13,00,000 2,00,000 -30,000 -75,000 95,000 -38,000 57,000 73,000 46392.81972

-7,20,000 -7,20,000 -1,39,092

73,000

65178.57143 58195.15306

Internal Rate of Return NPV @ 5% NPV Year 0 -7,20,000 34,826 Taking IRR at 5% and 12% IRR Traditional Formula = LR + { NPV @ LR/NPV @ LR - NPV @ HR} X (HR-LR) IRR 0.064017186 6.401718635 Year 1 Year 2 69523.80952 66213.15193 Year 3 63060.14469 Year 4 60057.28066 Year 5 495972.0634

Therefore Internal Rate of Return for this Project is 6.69600

A)

Payback Period Year 0 1 2 3 4 5 Future Cash Flows -7,20,000 73,000 73,000 73,000 73,000 6,33,000 PV of FCF Accumulated NPV on FCF

65178.57143 58195.15306 51959.95809 46392.81972 359181.1997

-6,54,821 -5,96,626 -5,44,666 -4,98,273 -1,39,092

Pay back Period Cannot be…...

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