Question

2. A project requires an initial investment of Rs.6, 00,000. It is estimated to have a
life of 6 years. The estimated net cash flows are as under:
Year Net Cash Flow (Rs.)
1 60,000
2 80,000
3 1,00,000
4 1,10,000
5 1,20,000
6 90,000
Hurdle rate is 10%. Calculatea. Payback period
b. Net Present Value
c. IRR of the project.
Assume that the standard payback period is 4 years. Should the project be
accepted as per each of the above measures? In case of conflict in decision
which method should be preferred and why?

Answer 1

Your answer is = 160,000