Financial Management- capital budgeting

A project costing 100 lakhs has a life of 10 years at the end of which its scrap value is likely to be 10 lakhs. The project is expected to yield 10 lakh rupees every year after depreciation. Depreciation is charged on straight line basis. At 12% interest rate ,the present value of one rupee annually for 10 years is 5.650 and present value of 1 rupee at 10th year is 0.322. Find the NPV and suggest if it should be accepted or not when the minimun return is 12%. choose correct answers

• Depreciation is 10 lakh

• Depreciation is 9 lakh

• Depreciation is 8 lakh

• Depreciation is zero

A project costing 100 lakhs has a life of 10 years at the end of which its scrap value is likely to be 10 lakhs. The project is expected to yield 10 lakh rupees every year after depreciation. Depreciation is charged on straight line basis. At 12% interest rate ,the present value of one rupee annually for 10 years is 5.650 and present value of 1 rupee at 10th year is 0.322. Find the NPV and suggest if it should be accepted or not when the minimum return is 12%. choose correct answers

• Total of Present Value of all Inflows is 1,10,57,000

• Total of Present Value of all Inflows is 1,03,75,000

• Total of Present Value of all Inflows is 1,00,35,000

• Total of Present Value of all Inflows is 1,07,35,000

A project costing 100 lakhs has a life of 10 years at the end of which its scrap value is likely to be 10 lakhs. The project is expected to yield 10 lakh rupees every year after depreciation. Depreciation is charged on straight line basis. At 12% interest rate ,the present value of one rupee annually for 10 years is 5.650 and present value of 1 rupee at 10th year is 0.322. Find the NPV and suggest if it should be accepted or not when the minimum return is 12%. choose correct answers

• NPV= 10.75.000

• NPV= 10,77,000

• NPV= 10,57,000

• NPV=10,55,000

A project costing 100 lakhs has a life of 10 years at the end of which its scrap value is likely to be 10 lakhs. The project is expected to yield 10 lakh rupees every year after depreciation. Depreciation is charged on straight line basis. At 12% interest rate ,the present value of one rupee annually for 10 years is 5.650 and present value of 1 rupee at 10th year is 0.322. Find the NPV and suggest if it should be accepted or not when the minimum return is 12%. choose correct answers

• project should be accepted

• project should be rejected

A company is considering to purchase a new machine for 1,20,000 with a life of 4 years, The scrap estimated after the project life is 20,000 rupees. The revenue generated is 10,00,000 and cash expenses is 5.50,000 per annum. The cost of capital is 30% and tax is 50%, choose the correct answer.

• Average return is 6,50,000

• Average return is 5,50,000

• Average return is 4,50,000

• Average return is 5,00,000

A company is considering to purchase a new machine for 12,00,000 with a life of 4 years, The scrap estimated after the project life is 2,00,000 rupees. The revenue generated is 10,00,000 and cash expenses is 5.50,000 per annum. The cost of capital is 30% and tax is 50%, choose the correct answer.

• Tax amount is 2,12,000

• Tax amount is 1,02,000

• Tax amount is 1,00,000

• Tax amount is 2,10,500

A company is considering to purchase a new machine for 1,20,000 with a life of 4 years, The scrap estimated after the project life is 20,000 rupees. The revenue generated is 10,00,000 and cash expenses is 5.50,000 per annum. The cost of capital is 30% and tax is 50%, choose the correct answer.

• ARR=10%

• ARR=35%

• ARR=30%

• ARR=32%

A company is considering to purchase a new machine for 1,20,000 with a life of 4 years, The scrap estimated after the project life is 20,000 rupees. The revenue generated is 10,00,000 and cash expenses is 5.50,000 per annum. The cost of capital is 30% and tax is 50%, choose the correct answer.

• Project should be selected

• Project should be rejected