Question

25.Following proposed investments for different projects with the indicated cash inflows are given.

Rank the investments deriving the Net Present Value (NPV) using a discount rate of 10%. State

which project should be chosen.

Projects Investments

(Rs.)

Cash Inflows (Rs)

I Year II Year III Year

A 4,00,000 4,00,000 --- ---

B 4,00,000 2,00,000 2,00,000 2,00,000

C 4,00,000 40,000 2,00,000 6,00,000

D 4,00,000 4,00,000 40,000 40,000

E 4,00,000 2,80,000 1,20,000 2,00,000

F 4,00,000 3,20,000 3,20,000 1,60,000

Present value @ 10% 0.909 0.826 0.751​

Answer 1

Answer:

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