Compute Discounted Payback Period, Net Present Value and Profitability Index of a project which costs Rs 50,000, cost of capital is 8% and is expected to generate following cash inflows:Year Cash inflows(Rs) 1 12,000 2 15,000 3 25,000 4 28,000 5 20,000 6 22,000 On the basis of Net Present Value and Profitability Index, suggest if the project is to be accepted or not.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
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ISBN:9781337514835
Author:MOYER
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Chapter10: Capital Budgeting: Decision Criteria And Real Option
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1. Compute Discounted Payback Period, Net Present Value and Profitability Index of a
project which costs Rs 50,000, cost of capital is 8% and is expected to generate
following cash inflows:Year Cash inflows(Rs)
1 12,000
2 15,000
3 25,000
4 28,000
5 20,000
6 22,000
On the basis of Net Present Value and Profitability Index, suggest if the project is to be
accepted or not.

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