Question

For cash flow given below,

Calculate NPV at 10% discount rate and IRR

C0 C1. C2

- 5,400 3,600 14,400 ​

Answer 1

Answer:

Company estimated inventory carrying cost at 60% per annum. Rate of consumption per day 35 units. The ordering

cost per order is RO 250 . The cost incurred for purchasing is RO 700. The rate of consumption per day is 30 to 40

and lead time to supply is 2 to 6 days. During emergency purchase the lead time is 3 days.