3. Assuming the Project A has Initial Cash Outlay of Rs. 1,50,000 and having Annual Cash Inflows of Rs. 55,000. The project A is expected to have life of 4 years.
Determine the sensitivity of net present value to variations in (i) Initial Cash Outlay
(ii) Annual Cash Inflows, and (iii) Cost of Capital
Under optimistic and Pessimistic Situation (assuming 10% change)
Given the Cost of Capital=10% p.a. and Annuity Factors(r%,4years) as follows:
Answers
Answer:
Assuming the Project A has Initial Cash Outlay of Rs. 1,50,000 and having Annual Cash Inflows of Rs. 55,000. The project A is expected to have life of 4 years.
Determine the sensitivity of net present value to variations in (i) Initial Cash Outlay
(ii) Annual Cash Inflows, and (iii) Cost of Capital
Under optimistic and Pessimistic Situation (assuming 10% change)
Given the Cost of Capital=10% p.a. and Annuity Factors(r%,4years) as follows:
Explanation:
Assuming the Project A has Initial Cash Outlay of Rs. 1,50,000 and having Annual Cash Inflows of Rs. 55,000. The project A is expected to have life of 4 years.
Determine the sensitivity of net present value to variations in (i) Initial Cash Outlay
(ii) Annual Cash Inflows, and (iii) Cost of Capital
Under optimistic and Pessimistic Situation (assuming 10% change)
Given the Cost of Capital=10% p.a. and Annuity Factors(r%,4years) as follows: