Question

8) A project costing 50000 Rs. is expected to yield an annual saving of Rs. 13500 before

depreciation and after tax. The life of the project is 10 years. Find out Net present value.​

Answer 1

Answer:

1) The Net Present Value (NPV) is a method that is primarily used for financial analysis in determining the feasibility of investment in a project or a business. It is the present value of future cash flows compared with the initial investments. Let us understand NPV in detail.

2)Net present value is a tool of Capital budgeting to analyze the profitability of a project or investment. It is calculated by taking the difference between the present value of cash inflows and present value of cash outflows over a period of time.